Crude oil prices, over $100 as recently as last summer, have dropped below $44.
Among the reasons given for the collapse are the slowing of the global economy. Recession or near-recession growth (or lack thereof) has hit much of Europe (some never completely dragged itself out of the last downturn) and Japan. Even growth in China is expected to drop well below traditional levels and perhaps as low as 7% this year. The only part of the world with impressive growth is America. And economists have fairly asked if the United States can carry the world on its shoulders alone.
One other aspect of the drop is bountiful supply. Fracking has opened new territory for exploration that just five years ago did not exist. Drilling in areas like the Gulf of Mexico has been helped by technology that allows companies to dig deeper. On the other hand, OPEC has held supply levels even. Additionally, Russia and Venezuela cannot afford to stop production, even if each losses money. Better to get some revenue than none at all.
Crude has dropped below $44 for the first time since depths in the recession in 2009. And, right now, prices do not have a safety net.
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