It’s hard to believe that gas prices averaged more than $4.10 a gallon across the country just six months ago, with most U.S. markets now seeing prices in the $1.50-$1.80 range. In fact, demand for oil has dropped off so much that OPEC announced the largest reduction in production in the organization’s history.
OPEC announced on Wednesday that it will be cutting daily production by 2.2 million barrels — the single largest cut in its history, according to MSNBC. In addition to the OPEC cuts, other regions such as Russia and Azerbaijan will be reducing oil production.
“I hope we surprised you,” OPEC President Chekib Khelil told the Associated Press. “If you’re not surprised we need to do something about it.”
Oil prices have taken a nose dive in recent months as a slowing global economy has curtailed energy demand. Despite OPEC’s announcement, oil prices fell to $40.20 per gallon, the lowest price since mid-2004.
Many industry analysts predicted that $35 would be the floor for oil prices, but as the worldwide recession deepens, we could soon see prices even lower than that.
