The astounding slide in crude-oil prices has put the commodity in a bear market. West Texas Intermediate has tumbled almost 9 percent this month alone as production ramped up in the U.S. Domestic crude output has reached 8.95 million barrels a day- the most since June 1985. The Energy Information Administration is forecasting production will climb to 9.5 million next year.

Cardiff Garcia of FT Alphaville says the output in the U.S. has put the country on the global supply map but at the same time it has contributed to the oil glut. The drop in prices will certainly hurt the big oil companies, oil-service firms and the exploration-and-production outfits. In addition he predicts there are certain parts of the U.S. that will feel the pain-- specifically North Dakota, Wyoming and Texas.

Garcia also says it’s no longer a straightforward supply versus demand story-- the slowing global economy is now definitely a factor. According to the International Energy Agency, crude consumption will rise by 650,000 barrels a day this year- that’s 250,000 fewer than last month’s estimate. Garcia says overproduction from the Mideast is a big reason for the drop backed up by speculation that OPEC would rather have more market share than higher prices.

Goldman Sachs last week said crude prices have fallen too much, too soon. Right now analysts are predicting that WTI prices will find support at $80 a barrel. Garcia feels lower oil prices only means good things for Americans. “People have more money in their pockets to spend. That can only help things. It’s sort of the equivalent of a tax cut, a real wage hike,” he says. Garcia thinks it also gives some leeway to the Fed allowing them to take their foot off the interest-rate hike pedal because oil prices affect headline inflation more than core CPI which backs out food and energy.