While U.S. consumers and businesses are in a holiday mood over the dramatictumble of oil and gasoline prices, the companies that produce and supply that oil are finding themselves in a pinch.
Crude oil fell during Monday trade to less than $63 a barrel, the lowest level in more than five years, and it has dropped about 35 percent since June, boosted in large part by the North American shale oil and natural gas boom. The U.S. Energy Information Administration reports U.S. proved oil reserves increased for a fifth straight year in 2013, while the nation's proved natural gas reserves rose 10 percent and are currently at an all-time high.
Add to that equation OPEC's recent decision to maintain its current level of oil production, and you have a lot of oil on the market -- and a lot of companies struggling to stay cost-efficient.
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5 comments:
Oh no, if we just open everything up, cut all the regulations, and let them drill at will, the oil companies will do all they can to support america by dropping gas prices back to 0.99/gallon.These companies are all about patriotism and protecting the american way.
Ramp up the subsidies because they are going to need it...NOT!
It's a ploy to try and dissuade us from drilling and exploring other energy solutions. Trying to make it appear that new technology is more expensive than continuing what we are doing.
So why if the price per barrel has dropped 35% in the past 6 months has the price at the pump dropped a similar amount. Gas prices in June were around $3.35gal. If we were seeing a direct correlation between barrel price and pump price then today gas should be around $2.18gal. Instead prices have only dropped 15-20% and gas is around $2.70-2.80gal.
11:12
Think about how long it takes for gas to get from extraction > the pump. It's a gradual process. Educate yourself about economics.
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