Gas prices are falling below $3 a gallon across the United States for
two big reasons: (1) the world economy is growing slower than we hoped,
and (2) global oil production is improving faster than we expected.
Read more: It's Coming: $65 Oil - The Atlantic
"India and China are slowing down,” said Charles K.
Ebinger, director of the Energy Security Initiative at Brookings. "The
IMF just downgraded Europe’s growth to less than 1 percent, and they're
already quite energy efficient. Brazil’s a problem, too. All around the
world there is no great growth story, and expectations are that things
will stay that way or get worse."
There is also unanticipated supply. A few years ago,
political turmoil was taking up to 2 million barrels a day off the
market. Now production is roaring back in Libya, southern Sudan, Yemen,
Nigeria, and even Iraq, and the global price of crude has fallen about
25 percent in the last five months. It's the same old story: low demand,
high supply, etc.
Read more: It's Coming: $65 Oil - The Atlantic
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