The oil price finally starts to slide

After spending the last few years trading in a range between around $95 a barrel and $120 a barrel, the price of oil (as measured by Brent Crude) has slid sharply in the course of the past three months. The slump has come despite upheaval in the Middle East, and talk of economic recovery in the US.

What’s driving it? Despite talk of ‘peak oil’ in the past decade, the oil market is currently well supplied: America’s oil output is at its highest level in 40 years, while problems in Syria and Iraq haven’t affected major oil-producing areas. The pressure in the market was made clear at the start of this month when Saudi Arabia cut its prices rather than production.

A lower oil price is good for global consumers and the economy overall (less money spent on energy means more to spend on other things) – but it could be very tricky for oil-sector stocks and, potentially, for producers of alternative energy.

Subscribe to The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Sign up