As the price of crude oil continues its downward trajectory, consumers enjoy a break at the pump, while major oil producing countries and companies sweat over the loss of revenue and the new normal in the global oil market.
Assistant Editor
In 2014 the world saw the beginning of a steady decline in oil prices, the outcome of which has yet to be determined. In July of last year oil hovered around an average price of 107 USD per barrel, and six months later prices dropped 50% to under 50 USD per barrel. New technologies like hydraulic fracturing (“fracking”): the forcing open of fissures in rocks below ground by introducing liquid at high pressures, are seen as reasons for the decline. It is actually old economic fundamentals of supply and demand, and the protection of market share that bear the main responsibility for the fall in prices.
While discussing the global oil market with the Middle East Economic Survey, Saudi Arabian oil minister, Ali al-Naimi commented that "oil 'may not' trade at 100 USD again," while also adding that "it is not in the interest of OPEC [Organization of Petroleum Exporting Countries] producers to cut their production, whatever the price is."