Why are oil prices droppingSolutionThe oil prices are fallin

Why are oil prices dropping?

Solution

The oil prices are falling, as in the last seven years, the production of oil has doubled in the US and there is an increase in the supply of the oil. The market for the oil from Nigeria, Algeria and Saudi are unable to find market as there is a decline in the import of oil in the US. Other nations like Canada and Iraq also have increased the exports and the only market available the competition has increased. The producers have been forced to cut down the prices in order to sustain the competition.

            Tough there are sign of decline in the production of oil in America, the decline is not significant enough and the supply is increasing from the Gulf and from Canada. The demand has been lagging also because the vehicles are becoming more efficient and there are several other resources of alternate energy that have been discovered and are being put to use, leading the supply to increase even further and causing the prices to drop.