Why Oil Prices Are Dropping

OilThe 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:

  1. “Demand is low because of weak economic activity, increased efficiency, and a growing switch away from oil to other fuels.”
  2. “[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.”
  3. “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.”
  4. “[T]he Saudis and their Gulf allies have decided not to sacrifice their own market share to restore the price.”

Check it out.

1 thought on “Why Oil Prices Are Dropping”

Comments are closed.