An oil price decline may be like a tax cut that stimulates the economy but it also means lost wealth for owners of fracking companies and for OPEC. Oil declined since July from $102 to $66. OPEC may have intended to use oil revenue to develop their economy and thus bought a lot of things from America and other developed countries. Domestic frackers will have to reduce purchases or layoff people.
The problem with lower oil prices is that it can disrupt business plans of oil producers triggering global economic weakness. For example Dubai had a leveraged real estate crisis in 2009 and was bailed out by its neighbor. If OPEC countries are unable to do bailouts then a crisis could erupt.
The 1986 oil price war resulted in the price declining 67% to $10 a barrel and created a massive depression in Texas and other oil producing states.
Lower oil prices could help middle income consumers a little bit, however, the risk is great that it could seriously hurt American and Canadian oil producers like a repeat of 1986 oil crash which lead to unemployment and debt defaults.
Declining oil prices help the dollar to go up which helps keep inflation low. It could provoke the Federal Reserve to do more stimulus to avoid deflation.
Investors need independent financial advice about the risks of a crash in the oil industry hurting the rest of the economy. I wrote an article “Plunging oil prices damage high yield oil stocks”.