Brent oil hits 28 dollars per barrel
Bad news for the oil industry, good news for drivers (especially those driving gas guzzlers): Brent oil has hit a new low today. This is not just time to fill up your petrol tank; it’s time to trade binary options!
Brent crude oil is currently floating between 28 and 29 dollars per barrel, a price we haven’t seen in over a decade. This low price followed when Iran decided to cut prices. With the nuclear sanctions no longer in the way, Iran is returning to the oil market with full force, aiming to increase production to 500,000 barrels per day in an already oversupplied market.
20 percent down
Although analysts don’t expect Iran to reach its full market potential anywhere in the coming months, the oil price took another fall and is now even 20 percent lower than a year before, when it was already over 60 percent below it’s peak just 7 months earlier. In June 2014, a barrel of Brent crude was sold for 115 dollars. Historically speaking, we haven’t seen an oil price this low in 12 years.
Not all good
Of course, filling up your tank is more fun than it has been in over a decade. However, the low oil prices aren’t just good news. Russia, for example, experiences a revenue loss of 2 billion dollars for every dollar the oil price drops. The Russian economy is unable to recover from its crisis unless the oil price goes up. Venezuela is facing similar problems. The South-American country was already struggling, and now faces an even more challenging battle with oil prices as low as they are now. In the other hand, most European countries could benefit from the oil price. A 10 percent drop may lead to a 0.1 percent increase in economic output. If the US will be able to maintain its oil production boom, remains to be seen.