The oil industry is currently in its deepest downturn since the 1990s with the current price of oil trading around $32. This price has been cut by more than 60% since June 2014 (from over $100/barrel) and is the lowest price a barrel of oil has been since 2004.
Regular gas nationally now averages under $2 a gallon, benefiting motorists and households that use heating oil to warm their homes with savings. However, an estimate 250,000 oil workers have lost their jobs, while oil-producing countries and states are suffering economic and possibly even political turbulence. Petrostates such as Venezuela, Nigeria, Ecuador, Brazil and Russia have been hit hardest and in the United States, Alaska, North Dakota, Texas, Oklahoma and Louisiana are facing challenges (New York Times).
Oil production is oversupplying markets and is not declining anytime soon, therefore, oil prices are not likely to recover anytime soon. There has been debate whether low oil prices will inhibit the growth of renewable energy because cheap energy may turn people and investors away from clean energy. Yet, strong clean energy policies would likely take the demand pressure off oil prices and are needed in long term planning perspectives to reduce economic vulnerability, increase resiliency, and alleviate climate change pressures (GreenBiz).
See how the price for a liter of gasoline has changed across the globe from 2014 to 2016 in the maps below. Prices are in US Dollar.
Written by Kathleen Emerson (1/26/16)