Despite a slight increase in recent weeks, a trend of sharply falling oil prices has continued for the past seven months.
According to BBC News, this means different things to various sectors of the global economy. Nations that export oil are likely to see revenues decline due to falling prices, while consumers in countries that import the majority of their oil are likely to pay less to drive their cars and heat their homes. Meanwhile, jobs are at stake, with The Denver Post reporting that Halliburton will be releasing 5,000 employees.
Drilling company Halliburton says it will eliminate at least 5,000 jobs in response to falling #oilprices http://t.co/tW6mkxHASk via @APThe Inquisitr recently reported that gas prices are slowly increasing in the U.S. but will the cost of a fill-up keep climbing?
— The Denver Post (@denverpost) February 10, 2015
United Press International reported yesterday that the national average price for a gallon of regular unleaded had increased for 15 consecutive days. In a report released Monday by AAA, the motor club offers an explanation for the recent increase in the cost of a gallon of gas despite falling oil prices.
"Refineries usually schedule maintenance during the first several months of the year when demand is relatively low, which can lead to decreased production and supplies."In addition, AAA states that refineries are preparing to make gasoline that is blended to prevent vaporization during the summer months. This gas is more expensive to produce than the blend sold in the U.S. during winter.
In the past, oil cartel Opec has cut production to prop of falling crude prices. This time, no such action is planned. Russia, which could also shore up falling oil prices by cutting crude production, has also confirmed that it will not be doing so despite a loss of about $2 billion in revenue for every dollar fall per barrel of crude. "If we cut, the importer countries will increase their production and this will mean a loss of our niche market," Energy Minister Alexander Novak told a reporter.
Saudi Arabia has no plans to cut oil production in the near future, BBC News reports, even though doing so would bring falling oil prices back up. Although the nation needs the cost of a barrel of crude to be around $85 in the long term, it has a reserve fund of around $700 billion and is able to withstand lower revenues for some time.
Falling oil prices threaten to slow America's ongoing drilling boom, says Business Insider. Supporters of the Energy Policy Conservation Act of 1975, which forbids the exportation of domestic crude oil, insist that the ban helps consumers and businesses alike, keeping domestic refinery profits from falling while helping to keep gasoline prices low. Meanwhile, oil experts who oppose the ban estimate that allowing U.S. exports would add about 8.7 million barrels of crude to global reserves, keeping them from falling and preventing massive price increases.
Falling oil prices have Texans in Congress pushing to allow exports of crude http://t.co/GiAna3WtZw pic.twitter.com/mVVj3aDtoSHow will falling oil prices affect you?
— Dallas Morning News (@dallasnews) February 9, 2015
[ Image via Business Insider]