Chart of the Day: Oil Prices Are Plunging Thanks to OPEC

Fight disinformation: Sign up for the free Mother Jones Daily newsletter and follow the news that matters.


OPEC finished up its winter meeting yesterday and decided not to cut oil production. This came as a surprise to those who still think of OPEC as the maniacal oil hawks who roiled global petroleum markets in the 70s, but less so to those who know that cartels are notoriously difficult to hold together—especially when it’s a leaky cartel that’s missing some key producers. In any case, OPEC members couldn’t agree on just who would pay the price of cutting production, and the Saudis, for reasons still unclear, were unwilling to shoulder the burden themselves this time around. So OPEC oil production will remain unchanged.

The result? After six months of declining oil prices, we suddenly got plunging oil prices. Why? Not so much because of the shale oil revolution in the US. For all the attention it gets, fracking has increased global oil production by only a few percent and would normally have only a moderate effect on prices. Unfortunately, these aren’t normal times: in addition to a small increase in the oil supply, the global economic slowdown has depressed demand. That’s a bigger factor than fracking, and with European and Asian economies looking increasingly fragile, not one that seems likely to be corrected anytime soon.

How low will oil go? No one knows. When will it turn up again? Probably not until the global economy starts to grow at a decent pace. And no one knows when that will happen either.

For more, check out Brad Plumer, who has a much more detailed explanation of the both the politics and the economics of the oil scene here.

A BETTER WAY TO DO THIS?

We have an ambitious $350,000 online fundraising goal this month and we can't afford to come up short. But when a reader recently asked how being a nonprofit makes Mother Jones different from other news organizations, we realized we needed to lay this out better: Because "in absolutely every way" is essentially the answer.

So we tried to explain why your year-end donations are so essential, and we'd like your help refining our pitch about what make Mother Jones valuable and worth reading to you.

We'd also like your support of our journalism with a year-end donation if you can right now—all online gifts will be doubled until we hit our $350,000 goal thanks to an incredibly generous donor's matching gift pledge.

payment methods

A BETTER WAY TO DO THIS?

We have an ambitious $350,000 online fundraising goal this month and we can't afford to come up short. But when a reader recently asked how being a nonprofit makes Mother Jones different from other news organizations, we realized we needed to lay this out better: Because "in absolutely every way" is essentially the answer.

So we tried to explain why your year-end donations are so essential, and we'd like your help refining our pitch about what make Mother Jones valuable and worth reading to you.

We'd also like your support of our journalism with a year-end donation if you can right now—all online gifts will be doubled until we hit our $350,000 goal thanks to an incredibly generous donor's matching gift pledge.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate