The price of crude oil dropped to its lowest level in more than a dozen years in Tuesday’s trading, at one point dipping below $30 per barrel. That busted through the floor set in December 2008, during the worst of the Great Recession.
“It really is sort of a perfect storm right now, where demand’s falling and supply’s growing, and that’s pushing down on price pretty heavily,” says Kenneth Medlock, senior director of the Center for Energy Studies at Rice University’s Baker Institute.
Crude oil inventories are backing up. That’s in part because of robust production in the U.S. and OPEC nations, but also because refineries are being taken offline for seasonal maintenance.
“But at the same time,” Medlock says, “Chinese demand in particular has faltered, and it’s only getting worse, and you’ve seen this hit more than just the crude oil market, right, it’s hit stock markets as well.”
Meanwhile, BP has announced a fresh round of layoffs in response to falling crude prices. The British company says it will cut about 4,000 oil exploration and production jobs worldwide by 2017. It employs nearly 6,000 people in Greater Houston.