Wednesday, November 5, 2014

Crude oil at four-year low after Saudi Arabia price cut

Oil rigs in California  
US oil production has been booming as a result of fracking in places such as North Dakota and Oklahoma

Crude oil prices have hit a four-year low after Saudi Arabia unexpectedly cut the price of oil sold to the US.
Brent crude fell to near $82 (£51.24) a barrel as worries about global growth also spooked investors.
Earlier, the European Commission reduced its growth forecasts for the eurozone.
Investors are concerned about the US oil industry in the face of slowing growth and lower prices.
Some worry that low oil prices could hurt domestic US producers dependent on high prices for profitability.
The price cut also sent shares in many energy firms lower, pushing down all three US share indexes.
Trade help Surging revenues from the US oil boom have led to calls on the government to remove regulations restricting the sale of US crude oil abroad.
In the interim, the growth in domestic oil production has helped the US trade deficit, as the US has become less dependent on importing foreign oil.
Separately on Tuesday, the Commerce Department's latest release showed that the US trade deficit unexpectedly widened in September as exports hit a five-month low, mostly due to economic weakness in Europe.
The Commerce Department said the trade gap increased by 7.6% to $43.03bn, as China and eurozone orders decrease and the strength of the US dollar hurt exports.

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