Another Month of Ups and Downs for Oil

Wednesday, December 16, 2015

As we all know when it comes to the oil market, things change quite frequently. One week filling up your gas tank can cost $4 per gallon, while it can be less than $2 for a gallon just a few months later. These fluctuations have not been good news for the oil industry at large, and unfortunately there doesn’t appear to be much relief on the immediate horizon.

There currently is a record-setting glut of oil thanks to stagnant production levels by OPEC countries and the boon that the United States has had in recent years from fracking and other oil production efforts. Just last week, OPEC member nations met in Vienna and declined to make any adjustments in production, notes Britain’s The Week.

In addition to that, the United States’ overall oil output grew to 9.2 million to close out November MarketWatch reported last week, the 10th straight week of gains. With such record-setting surpluses of production and increased efficiency, it’s no surprise that oil prices have plummeted.

With OPEC failing to make any changes to production levels last week, economists have begun to sound the alarm that prices could continue falling to new record lows. Some analysts cited in The Week’s report say that Brent crude prices could dip below $40 per barrel, while some extreme forecasts take it to basement prices – even below $20 per barrel.

As the world continues to watch the situation, the market remains in a state of imbalance – bad news for investors and those working within the market, but welcome news to everyone at the pumps.