Don’t let oil glut slow work on future energy needs
by Mark J. Perry
The market is awash in oil. Oil was recently below $30 per barrel for the first time in more than 12 years before rising slightly in recent days. Gasoline is now down to $1.65 per gallon in Michigan, and as low as $1.35 at some stations. After years of $100-per-barrel oil and pain at the pump, consumers are reaping the rewards of the oil crash. The average American household saved $700 last year at the pump. Similar savings are almost certain this year as well.
But cheap oil is most likely not here to stay. Now is not the time to get complacent with our energy policy.
Every day 95 million barrels of oil are consumed around the globe. Currently, there’s an extra 1.5 million barrels of capacity in the oil market and that relatively slim margin has sent the price of oil free-falling. With oil now so cheap, producers the world over have pulled back on investments in new production to the tune of hundreds of billions of dollars. Oil companies, here and abroad, have downsized or even folded. Some 100,000 oil workers have lost their jobs in the U.S.