The price of a barrel of oil is in a free fall according to KUT News. The U.S. oil benchmark West Texas Intermediate fell below $50 early this week... matching levels of spring 2009.
The drop is linked to OPEC’s boosted production and a stronger dollar.
OPEC member nations production increases are an effort to protect their market share and undercut American profits. Both Iraq and Russia are producing crude at record levels.
The dollar’s increased value is at a nine year high against the euro. Reasons for that gain are renewed instability in Greece and the possibility that the European Central Bank could introduce quantitative easing to stimulate the eurozone.
The big question for the American oil industry is do they continue developing oil fields as the financial incentives evaporate.