SPRINGFIELD, Mass. (WWLP) – The price of a barrel of oil is approximately $30 which is $70 less than it was over a year ago.
According to the International Energy Agency, oil and gasoline prices could continue to drop even lower. The reason behind the price plunge — supply and demand.
Though the demand is low because of struggling global economies and a growing use of fuel efficient cars, the supply is high.
22News spoke with Associate Economics Professor Karl Petrick at Western New England University to find out what has changed.
“U.S. is producing a lot more oil,” Petrick said This has produced a lot more competition for other oil producers like Nigeria for example going into the Asian Markets, Iran is coming back into the world market in a big way with sanctions have been lifted. All of this will push oil prices down which will push gas prices down.”
In March, oil companies will begin to switch their products to a more expensive summer blend, which could mean a slight increase in gas prices. If the current supply and demand trend continues, however, then prices are likely to stay put on the low end.