The fact that I was able to fill my car’s gas tank for less than $17 yesterday made me want to post about dropping oil prices. The Economist has a nice summary, stating that four major things are affecting the price:
- “Demand is low because of weak economic activity, increased efficiency, and a growing switch away from oil to other fuels.”
- “[T]urmoil in Iraq and Libya—two big oil producers with nearly 4m barrels a day combined—has not affected their output. The market is more sanguine about geopolitical risk.”
- “America has become the world’s largest oil producer. Though it does not export crude oil, it now imports much less, creating a lot of spare supply.”
- “[T]he Saudis and their Gulf allies have decided not to sacrifice their own market share to restore the price.”
Check it out.