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Oil Prices Sink to New 11-Year Low
Oil prices have dropped below $35 per barrel, their lowest level since mid-2004.
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Oil prices have dropped below $35 per barrel, their lowest level since mid-2004. The latest decline continues a slump that began at the end of last year.
Volatile petroleum futures have slumped 70% below their level 18 months ago. Prices are being driven down by output from U.S. shale oil operations, the impact of more efficient vehicles and weak global economic growth.
The Organization of the Petroleum Exporting Countries, which accounts for about 45% of worldwide crude oil production, has propped up prices in the past by cutting output. But the cartel, led by Saudi Arabia, refuses to do so this time in an effort to defend its market share.
OPEC had hoped that riding out the slump would squeeze U.S. shale producers, restore prices and help it regain power over the market. But that strategy has not worked. In the meantime, lower prices are forcing OPEC’s weaker members to continue high output to support their economies.
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