You would think that oil as a commodity would not be as volatile as it is, year after year, but oil, almost behaves more like a low-beta stock, as opposed to the most valuable commodity that the world has ever known. For instance, taking a look over the last ten fiscal years, from 2005-2014, the average price of domestic oil in America on a yearly basis has ranged from a low in 2005 of $50.04/barrel to a high of $91.48 in 2008, with 2014, because of the recent precipitous slide in pricing estimated to be on track to be lower in aggregate price than either 2008 or 2013. To get a better perspective on the price of oil, recognize that in 2005, the average price of oil as reported by inflationdata.com was $50.04 a barrel, which was the first year in the history of oil that the price of oil had exceeded $40/barrel on an annual basis, let alone the price of $50/barrel. The recent sudden drop in oil prices is consequently not historically unfamiliar, nor should we expect this volatility to go away anytime soon.
While there are some pundits that will argue that a reduction in crude oil pricing does both harm to our economy as well as to job creation, their reasoning is based on the premise that America produces a considerable amount of oil each year, employing indirectly or directly a few million people, there are fundamental factors to be acknowledged as to why this position is basically wrong. For instance, in 2009, Exxon/Mobil made a profit of $19.42 billion, while this was a considerable drop off from 2008 in which their profit was a record $44.06 billion, this speaks volumes though about the real cost of extracting oil and the profitability of the business in aggregate. It also indicates, that large corporations, such as Exxon, recognized that because the price of oil can go up as well as down, that it behooves such a company to "hedge" their oil prices so as to normalize their earnings expectations. It is this type of hedging that should be a matter of policy and principle for America's oil, shale oil, and fracking producers, and for those that haven't learned the lesson of the prudence of doing so, they will, one way or another.
Additionally, most people simply look upon lower oil prices as equating to lower gasoline prices and while this is most certainly true, the price of oil and its massive importance to our economy and to the pocketbook of Americans has far deeper ramifications than just gasoline for our vehicles. For instance, crude oil, when refined and processed, will become plastics, detergent, heating oil, jet fuel, synthetic rubber, synthetic fabrics, fertilizers, food additives, medicine, paints as well as cosmetics. All of this basically means, that the price of oil affects the pricing of the foregoing products and consequently lower oil prices is an almost certain unmitigated good.
Finally, while America which was once the greatest oil exporter in the world has recently found ways through hi-technology, equipment, and fracking to increase its domestic oil production to rates not seen in a generation, it is still a nation of petroleum importers. According to the EIA.gov the "…the U.S. imported approximately 10.6 million barrels per day of petroleum in 2012 from about 80 countries. We exported 3.2 MMbd of crude oil and petroleum products, resulting in net imports (imports minus exports) equaling 7.4 MMbd." Clearly, the United States is still a massive importer of petroleum products and consequently anytime that the price of oil drops, it is beneficial for Americans, because it leads to lower fuel prices as well as to lower pricing for petroleum based products.