CNN – Oil plummeted below $30 a barrel on Tuesday for the first time since December 2003. The latest wave of selling leaves crude oil down 19% this year alone. It represents an incredible 72% plunge from crude oil’s June 2014 peak of almost $108.
“The fundamental situation for oil markets is much worse than previously thought,” Barclays commodities analysts wrote in a client note.
It’s great news for American drivers. The average price of a gallon of gasoline fell below $1.97 this week, compared with $3.68 about 18 months ago, according to AAA.
Here’s why crude oil prices keep crashing lower:
1.) OPEC in complete disarray: Oil prices initially rallied on Tuesday after Nigeria’s top oil official and the outgoing OPEC President Emmanuel Kachikwu told CNN the oil cartel is considering an emergency meeting. That fueled hopes of an output cut that countries like Nigeria have been begging OPEC leader Saudi Arabia for.
However, officials from the United Arab Emirates quickly moved to downplay those hopes, saying the current strategy is working.
The public back-and-forth between OPEC members highlights the deep fractures within OPEC that have diminished the already-low chances of the cartel cutting output.