January 6, 2015

Oil’s Fall Continues Into 2015, And Stock Markets Shudder

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January 5, 2015 | The New York Times | Clifford Krauss and Peter Eavis

Oil prices hit a new five-year low this week, with West Texas Intermediate falling below $50 a barrel on Monday. That’s down by more than half since June, which has prompted many people to start wondering out loud about how low oil prices can go. In a tongue-in-cheek tweet, oil analyst Jamie Webster writes: “I’ll likely use my future tweet generator quite a bit in ’15 ‘Brent fell to $X/b, the lowest since mmyy.'”

Most seem to agree that the reasons for the sudden decline are weakening global demand, and oversupply. The New York Times looks at that in depth, as well as how low oil prices are affecting the stock market. They write that little change in price is expected through the middle of the year, which is great news for consumers and bad news for oil producing states.

For a quick round-up of winners and losers, check out this Bloomberg slideshow. Among the biggest losers is Harold Hamm, the CEO of Continental Resources. According to Bloomberg, he’s lost $12 billion in the last three months – more than half his fortune. Among the winners are airlines, which are expecting to see a huge increase in profits over the coming year as fuel prices drop.

Inside Energy has been following the oil price decline from the beginning. In our latest series, Boom 2.0, we examine how oil’s boom-bust cycle plays out on the ground.