Americans are used to higher oil prices traditionally correlating with conflicts in the Middle East, but why are prices now dropping so low – with ongoing unrest in the region and the rise of militant group ISIS?
Just last week, Brent Crude fell another $4 to hover around $84 a barrel, a 47-month low.
One of the reasons for the crude drop – and therefore lower prices for consumers at the pump – is because the United States is now producing more oil than it used to.
But industry experts have predicted that if oil prices fall below $70 a barrel, U.S. production will decrease as some exploration methods – most notable for shale oil – may no longer be cost effective.
The latest price war could have significant geopolitical consequences, since some conflict-ridden countries are starting to pick up production, while major producers Iran and Russia could be forced to cut back.
The discussion points out that the abundance of oil comes at a time when a “gusher” of energy technology is hitting Silicon Valley, which is innovating unprecedented gains in energy efficiency and productivity.
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