Sunday, 15 February 2015

Falling Oil Prices

In July 2014, oil was going for $100 per barrel. However, now it has been reduced to $60 per barrel. This is due to the increase in supply, mainly from Libya. Another factor was that OPEC could not agree on production cuts, therefore there is more supply than demand, leading to a drastic drop in prices. Although this is good news for consumers, it can be a blow to government funds in countries such as Iran or Nigeria, where they depend heavily on oil revenues to fund government programs.
This article has taught me that we always have to look at both sides of a story. Although a fall in oil prices may be good news to consumers such as us, who use it for fueling cars or cookers, we have to remember that countries that depend on oil to provide money for their government will be facing  hard times, and we must appreciate what we have. I also learnt that we have to think of the worst case scenario so the times of hardship, we have something to fall back onto.

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