The Saudis make a bold, expert-befuddling statement with oil production, and oil prices fall to four-year lows.
Benchmark WTI crude dropped to less than $77 a barrel while Brent crude sold in the mid-$82’s Tuesday morning, the lowest prices since September and October 2010, respectively.
The latest price drop first began getting headlines Monday as Saudi Arabia announced it would lower prices for the U.S. while increasing prices in other regions like Asia.
The news couldn’t have made OPEC countries very happy as many of them are heavily reliant on oil prices for their budgets.
Saudi Arabia’s refusal to decrease oil production is largely seen as a response to big increases in U.S. shale oil output in recent years through fracking. The country doesn’t want to lose market share here. (Video via Journeyman Pictures)
SARA KENT, THE WALL STREET JOURNAL REPORTER: “What the Saudis have made clear behind the scenes is that they have absolutely no intention of cutting their oil production.”
ANDREW PEAPLE: “Do you see prices falling further from here?”
KENT: “Without OPEC reining in production, it seems likely we’re in a period of oversupply.”
In the meantime, while markets might not be overly thrilled with the big drops, average Americans have likely loved them.
AAA says gas prices fell on Saturday to a national average of $2.99 a gallon, the first time in 1,409 days the national average dropped below three bucks. (Video via CBS)
This video includes images from Getty Images / Majid Saeedi and Getty Images / David McNew for Newsy.
