The price of oil has dropped significantly in the last 6 months. The cost in June for oil was over US$100 a barrel (159 liters), and now it is below US$70. Major oil exporting nations, such as Saudi Arabia and Russia, are still producing as much oil as they used to, but global demand for oil is falling. One of the reasons is that the economies of several countries around the world (such as China, a big importer of oil) have slowed down, and they have reduced their imports of oil. Another reason is that the United States, a huge importer of oil, has now started producing a lot more oil within the country so it doesn’t need to buy as much. Oil supply is high but demand is lower, and hence it’s cheaper.
Here are two videos by BBC about oil prices dropping.
Image Credits: biofuelschat.com for the oil barrel image
Sources: Economist.com, BBC