Wednesday, 7 January 2015

What Cause The Drop In Oil Prices

The drop in oil price is cause by the old business science, when supply is more than demand the price of any commodity falls. Countries who's economy is solely dependable on oil is feeling the hardship of the fall in oil price.

Venezuela ,Nigeria and Russia needs a barrel of oil to be sold for more that $115 so that they can balance there economy and prevent them from entering into a rescission. What cause the over supply of oil on the market is simple.

In mid 2000,s oil price  was moving like the wind, the price of oil went past the $100 dollar mark. That push countries like North American and Canada to look for more oil in places like North Dakota which they have found a sea of oil which can last for many years to come.

More fuel efficient cars or now built that can give you up to 30 miles to the gallon, electricity companies have now build more fuel efficient gas turbines to produce cheaper and cleaner electricity.

More countries have also venture in alternative energy like solar, hydro electricity and windmills, with all these new inventions and findings the demand for oil as becomes way less and that's the main cost for the reduction in price.

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