Tallahassee Journal

Oil prices topple below $35 amid market turmoil

Oil prices topple below $35 amid market turmoil

Oil prices toppled below $35 on Wednesday morning as investors grappled with a turbulent start to the year for global markets. A rough economic outlook in China, another day of stock declines and North Korea’s claim of testing a hydrogen bomb sparked the selloff. The price of a barrel of West Texas Intermediate crude oil fell 3.3% to $34.78 at 8:15 a.m., while Brent crude oil plunged 4.3% to $34.86.635537951629891777-AP-Norway-Satoil-Arctic-Drilling

In addition to the economic concerns and geopolitical issues, the market remains overwhelmed with a global glut of oil. Saudi Arabia, the largest producer in the Organization of the Petroleum Exporting Countries, has refused to slash production. And many U.S. producers have kept oil wells flowing despite the crushing financial blow of low prices. Taken together, it’s a formula for prolonged period of low prices. The only question is how low the floor goes.

In some corners of the economy, it’s a good thing. U.S. vehicle sales hit an all-time record in 2015 of 17.5 million, edging the previous mark set in 2000. The plummeting price of petroleum has led to gasoline prices of less than $2 per gallon at most stations throughout the country, according to AAA. Though lower oil prices have boosted the pocketbook of consumers, the downturn has undermined the U.S. oil and gas business. Energy companies announced more than 258,000 layoffs globally in 2015, according to Graves & Co., which expects the job cuts to continue this year.


November 2017
« Oct