Things certainly look great for consumers and horrible for producers, but don’t get used to the current situation.
Production Falling Off A Cliff
The biggest culprit for oil’s plunge starting in the middle of 2014 was the enormous growth in U.S. shale production. Output in the country had grown by nearly a million barrels per day for three-straight years up until that point, and the market simply couldn’t absorb that breakneck pace of growth anymore. Prices cratered from more than $100 a barrel in July 2014 to less than $45 in early 2015 (they later moved even lower to $37.75 in August of this year).
Compounding the oil market’s problems was a surprise decision by the Organization of the Petroleum Exporting Countries (OPEC), led by Saudi Arabia, to increase its production to punish and steal market share away from U.S. producers. OPEC’s strategy worked, and now U.S. output is tumbling on the back of reduced drilling, with daily production down 500,000 barrels from its high of 9.6 million barrels per day.”
Citysearch Rental Network Inc. is a full service property management company specializing with corporate relocation clients moving to and within Calgary. Although there have been numerous layoffs in the energy sector, there are still many employees working in the energy sector! Citysearch is pleased to be placing tenants into desirable properties.
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