For the first time in over a year, American crude oil sold below $50 per barrel. Experts predict that crude oil will go for $11 cheaper overall in 2019, and the reason is a ramping-up of US-produced oil. November showed the largest monthly decline in oil prices since 2008, all due to US oil, the volume of which has never been as high as it is right now. In spite of local pipeline restraints and dipping prices, the US’ largest oil field, the Permian Basin in western Texas, continues to pump out oil at record rates, thanks in part to developments of shale processing machines. Unlike international oil producers like OPEC, American producers can’t deliberately restrict their oil supplies to drive up demand, lest they be sued for misconduct, so once the oil is pumped, it’s got nowhere to go but into the market.
As nice as it is to have an abundance of oil and, by extension, low gas prices, it pays to remember that oil is a worldwide commodity, and its sale forms the backbone of many an economy. If its value continues to drop, the economy will slow down even further, and that could land us in another recession. Whether we like it or not, our foreseeable economic future is relying on oil prices increasing.
