What is happening to the price of oil?

What is happening to the price of OIL Oil prices are in rapid decline... After four years of relative stability, global oil prices began to plummet in mid 2014. Oil Price Trends 2010-2015 (median annual figures) 150 100 50 ------ ----- --- 2010 2011 2012 2013 June 2014 Sept 2014 Jan 2015 Aug 2015 Jan 2016 Year Why is the price of oil dropping? Rise in US domestic production United States production of oil has doubled rapidly in the last two years. This means that Saudi, Nigerian and Algerian markets is now competing for Asian markets. Producers are now being forced to drop prices. Collapse in global demand Global demand in 2014 began to slump, due to economic slowdown in China, continued problems in the Eurozone, and global demand for oil was beginning to slow down. This is compounded by the fact that Western economies are becoming increasingly energy efficient. Oil producers didn't cut back Many expected the other major oil producing countries to cut back on their own production Instead the major OPEC countries decided to increase production, in the hope of increasing their market share. Who benefits? Who loses out? United States Russia This is good news for the USA, as consumers continue to benefit. Russia's currency, the rouble, has been devalued by falling oil prices It frees up $75 billion that American consumers can spend on other things. Oil and gas comprise 75% of Russia's exports India Iran India is reliant on imported oil, so it is a beneficiary of lower oil prices. Iran is seeking to reduce its dependency on foreign oil. US banking sanctions have cost Iran its oil revenues. Eurozone Venezuala The EU imports 80% of its oil. This means that lower fuel prices are welcome in a part of the world facing a lot of economics challenges. Venezuela will lose $700 million for every dollar drop in oil price. It's economy is nearly 96% dependent on oil. http://www.ft.com/cms/s/2/3f5e4914-8490-11e4-ba4f- 00144feabdco.html#axzz3xhjJEd5S http://www.vox.com/2016/1/12/10755754/crude-oil-prices-falling http://www.bbc.co.uk/news/business-29643612 Crude oil prices ($ per gallon)