Chris Mooney (c) 2014, The Washington Post. WASHINGTON — The price for a barrel of West Texas Intermediate crude oil — a U.S. benchmark — closed Thursday at $59.95, a level of great psychological significance.
Since Thanksgiving, when member nations of the Organization of the Petroleum Exporting Countries decided not to cut oil production, prices have tumbled. But this also is part of a longer-term pattern, a fall of more than $40 per barrel since late June.
The last time prices for WTI crude were below $60 per barrel was July 2009, during the Great Recession.
The plunge in oil prices has been a boon to American consumers, who are paying a nationally averaged price of $2.62 per gallon for regular gasoline. A year ago, the national average price was $3.26, meaning drivers this week are paying a striking 64 cents less for a gallon of gas on average.
What is more, gas prices may have further to fall as the market responds to the latest declines in oil prices.
One catalyst in the market Thursday, according to Bloomberg News, was comments by Saudi Arabia’s oil minister, Ali al-Naimi, who suggested that there is no need to cut production and that the oil market will naturally correct itself.
What is particularly striking is to find oil this low not during a dramatic recession, as in 2009, but when there is no immediate economic crisis. To find prices below $60 at a time significantly earlier than the 2009 economic crash, you have to go back to early 2007.