For the first half of 2014 the oil market looked just as it had the year before—and the two years before that.
As The Associated Press reports, oil was over $100 and drivers in the U.S. were paying around $3.50 for a gallon of gasoline. Economies around the world seemed to have adjusted to higher priced oil, and oil companies were using high profits and debt from willing lenders to scour the world for new reserves. And there was no real hope or expectation that U.S. drivers would see a price at the pump that started with a “2” ever again.
Then, despite intense turmoil in the Middle East and an improving economy in the U.S.—things that have historically sent oil prices soaring—the price of oil went into a nosedive. In the second half of 2014, it dropped by half, to depths not seen since May of 2009 when the U.S. was in the Great Recession. By December, some drivers even saw a price at the pump that started with a “1.”
The story of how—and why—oil has fallen from a high of $107 a barrel in late June to less than $60 a barrel in late December is a complex tale that amounts to the financial shocker of 2014. Read the full story.
