Are oil prices still dropping? This question is spreading throughout the United States like wildfire.
The World In Crisis
The price of oil did drop to a negative number, around -30 dollars per barrel. That means the companies had to pay people to take it. Using common knowledge that would be a great deal but the oil companies are out of storage space to put it, so no one could buy it. It’s not just America who’s, suffering it’s the world.
Saudi Arabia And Russia
Right before the whole coronavirus started Saudi and Russia got into a price war. The two economies rely heavily on oil. That is how Saudi’s people make their money. Depending on how much money they make from oil determines Saudi’s citizens paycheck. If oil keeps plummeting there economy is at risk of collapse. What about Russia? They will also be crushed at the hand of oil depending on what it does.
I mentioned briefly before that Saudi Arabia and Russia got into a price war. What exactly is this price war? It happened when they did not agree on terms with a deal they were making so Russia tried to make it hard on Saudi by lowering oil prices. In backlash Saudi completely lowered their prices, also hurting the world. Then the coronavirus struck devastating everyone.
Are Oil Prices Still Dropping?
Recently they skyrocketed by about twenty thousand percent. But this effect could take a toll on the world’s oil. Companies are still losing money per barrel even though it’s at seventeen dollars a barrel. Some people are speculating that it will go back down to negative numbers, but who knows, maybe this is the new norm. If you have any insight about this crisis or have an opinion of your own, tell me about them in the comments section below. Have a great day!