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November 8 Era of Low Fuel Prices Coming

Recently global oil prices have fallen dramatically, or about 20% since June of this year to the present, with prices now about $80 per barrel, largely due to the radical energy revolution the United States has undergone in the past few years with massive shale oil and natural gas production. Indeed in July the US marked record highs for oil exports in the past 57 years, with daily exports of petroleum reaching 8.8 million barrels. Along with decline in domestic imports, and increasing export volume from major producers such as Saudi Arabia, Libya and Kuwait, global supply and demand has become imbalanced so prices have fallen precipitously. The Kuwait Petroleum Minister has forecast prices will only likely stabilize around $77 per barrel, because that is the level of Russian and other energy exporters production overhead. Should the price fall below that level, major global economic affects could be felt in producer economies.

Some scholars argue that this precipitous decline in oil prices is the result of political strategy by the US to constrain the Russians. Nearly 20% of the Russian budget comes from energy and petroleum exports, and as a result of the decline in the Russian stock market the economy has suffered with the value of the ruble declining 9%, and with the EU economic sanctions applied because of the Ukrainian situation, so if Russia is unable to overcome the present oil price crisis, they may face a major financial crisis.