Price of Oil Drops Below $50January 6, 2015 1:23 pm
The price of oil dropped again this week as US WTI crude fell to USD 49.56 a barrel, the lowest price in 5 years. The dip in oil prices caused repercussions on Wall Street and the FTSE 100 opened down 2.6 points at 6,414.6.
US oil production has dramatically increased recently, as fracking – the process of extracting oil from shale rock by injecting fluids into the ground – has transformed the process in the country.
The increase in production has come just as economies around the world have slowed their demand for oil. Opec’s decision to continue extracting oil as its current pace has left investors worried and shares of many of the world’s leading energy firms have declined sharply.
Despite the effect this had had on the oil-heavy FTSE 100, it’s anticipated that lower fuel prices will in time slash industry costs and prompt a consumer spending boom that supports the economic recovery. After all, lower oil prices mean cheaper petrol and holiday prices!
Categorised in: News
This post was written by Kayleigh Driscoll