The price of oil, which has been on a rollercoaster as of late, has once again dropped. This time oil prices dipped below $75 a barrel today, which is a new 13-month low. A gallon of regular gas fell nearly 4 cents overnight to a new national average of $3.125, according to auto club AAA. Signs are not pointing to an increase in demand after the gasoline price drop.
The Organization of the Petroleum Exporting Countries (OPEC) said rich nations in 2009 are expected to need only 400,000 barrels a day more oil than this year. Total oil consumption dropped in developed countries by more than 1 million barrels a day as of September over a 12 month period. Could this be the outcome of a mass attempt at conservation?
When the skyrocketing price of oil shot through the roof in July, reaching an apex of $147.27 on July 11, reporters and government officials claimed that our global demand was so great that the supply couldn’t meet the demand. A gasoline station near California sold gas for over $5.11/gallon earlier this year, thereby causing local residents to re-think personal usage. A global economic slowdown is now forcing consumers and businesses around the world to cut back on energy use and conserve their precious resources.
OPEC’s report comes about a month before the cartel is scheduled to hold a special meeting to discuss ways to deal with oil’s slide, including the possibility of tightening output. OPEC controls 40 percent of the world’s oil supply; though analysts say a cutback in OPEC production would likely not dramatically alter crude’s downward direction. Trader and analyst Stephen Schork suggested that $50 “is now within the realm of possibilities.”
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