The drop in oil prices has caused a stir among countries that depend on the high prices to meet their national quotas. Venezuela, Nigeria and Russia are among the countries that have been under pressure due to the sudden drop in oil prices. In an interview with CNN, Chad Brownstein, revealed that one of the primary causes of this drop in prices is the fact that there have been over drilling, particularly in the United States.
Competition between the United States and the Saudi Arabia as well as the United Arab Emirates also is also causing this drop in prices. The country that will be benefiting the most is China, where importing oil at $70 per barrel or less actually lowers the country’s overall production cost by quite a big margin.
“It’s very important to diversify,” Mr Brownstein reemphasises his thoughts on how the United States can survive this price drop and the stress it puts on the US monetary. “I think 70 is the new 100 ‘from a 5 year strip perspective’. It’s the new standard by which the US operators are going to have to view their drilling strategies.”
The energy analyst and chief executive officer of Rocky Mountain Resources is firm in his analysis about the situation. If oil price is going to level at the $70 per barrel over the coming years, the US policy makers need to re-evaluate their policies, invest more in job-creating projects and rethink their national pipeline strategy.