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Analyst: Plummet In Oil Prices Should Be No Cause For Worry — Yet

Experts say the steep drop in oil prices is neither worrying nor surprising. 

Oil prices took a steep tumble this week, but some experts say the drop is neither worrying nor surprising. 

The recent plunge in oil prices was bound to happen, said Jim Krane, a Wallace S. Wilson Fellow for Energy Studies at Rice University’s Baker Institute for Public Policy.

“You know, the dam is broken, and all these compounding effects have pushed prices way back down,” Krane said. “Whether we’re gonna see a rebound like we often do in oil markets is anybody’s guess, but I think a lot of folks are going to be watching OPEC.”

Krane said that factors driving oil prices down include increased U.S. oil production, a run-up in prices that occurred ahead of President Trump’s reinstated sanctions on Iran, and conflicts in the Middle East. 

As for Texas, Krane said people should not be worried — yet.

“Oil prices affect the Texas economy sort of in the long run,” Krane said. “I think oil prices would have to go down and stay down for quite a while before you saw, you know, any layoffs or any perceptible effect on companies operating in Texas.”

OPEC and partners will meet in Vienna, Austria on December 6, where they are expected to make critical production decisions.

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