Oil Rules

The last six months in the oil industry are being called the greatest recession in prices since World War 1 — a $100 drop since July. And with light, sweet crude for January settling at $40.81 a barrel today on the New York Mercantile Exchange, everyone in the industry is wondering, How low will it go?

Most analysts are saying that once some of the economic recession eases, so will the low oil prices. After all, the high oil prices are part of what got us in this economical situation, right?

In October, when crude was above $60, OPEC said it would shrink output by 1.5 million barrels a day. But consumption is down by 1.27 million barrels in the U.S. alone. It seems that OPEC will have to cut more in order to compensate for lessened demand.

It’s been an free fall roller coaster since January, and we are all hoping this ride will start cranking back up soon.

Lindsay Goodier, Online Editor, OilandGasInvestor.com

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