Should The Oil Prices Drop Nationwide?

Oil Prices Drop Nationwide

Out of all of the nation’s industries, the crude oil industry has potential to be the most stable. For example, the price of crude oil has been fairly constant since 2010. It hasn't changed dramatically until mid year 2014 when prices dropped by nearly 40%. Many economists and industry analysts have looked into the causes of the sharp drop in prices and have come to the conclusion that the oil prices depend on the basic economic idea of supply and demand. The supply of crude oil has been increasing dramatically over the past few years as the demand for this oil has been dropping. The lack of demand for crude oil can be the result of the “Green Movement” which encouraged people to cut back on their consumption of

Since there is currently so much oil in the economy, the demand is very low since people do not need to search far in order to find the surplus of oil awaiting the consumers. According to Yahoo! News, the overall worldwide demand for crude oil has recently dropped. Economic downturns in Europe, Japan, and China have also led to reduced use oil worldwide. This then leads to dropping prices, as the supply outweighs the demand (inquisitr.com). This basic economic idea is exemplified in a bar graph showing the rising oil and biofuel supplies in the US contrasting the declining demand for oil from US citizens (smartplanet.com). This visual representation of the law of supply and demand shows how it relates to the US economy today. The nation lacks the essential balance between the two factors, thus resulting in low oil prices. The White House Administration has even acknowledged the drop in demand by stating that, “Since President Obama took office, U.S. oil demand has declined, in part because of these efficiency initiatives,” (whitehouse.gov). The “initiatives” being referenced were those of creating a healthier, “greener” environment. The price of oil is directly affected by the decreasing demand for oil due to the surplus of