Oil Prices: What’s Behind the Volatility? Simple Economics
Companies are losing money due to the fact of withdrawing from investments being made
for production and this will cause more supply and less demand for the company and the
customers; this has been the deepest down turn since the 1900s. In result to this serious
problem, some companies have even went bankrupt and lost their jobs. About 250,000 oil
workers are without a job, thats a lot of workers without jobs. This problem of workers
being without work will make the unemployment rate go up dramatically even if people
are trying to look for work and others who aren’t necessarily looking. The economy has
gotten even worse due to these problems. Now a days, it’s hard to find a simple job. The
reason for all this happening is because of the change of price for oil barrels. The price for
the oil barrels now are about $40 to $50 a barrel, when, in order to be profitable they need
to be at least be above $60 a barrel. Michael Stravato said “Some think it will be years
before oil returns to $90 or $100 a barrel.” That price was actually the norm for a period of
time.
You may ask what’s the current price of oil and why is it effecting the economy so badly?
The current price of oil is $50 a barrel and its effecting the economy by the United States
domestic production has doubled over the past years. The oil imports need to find
