Oil Prices Hit A New Low. Here’s Why That Might Be A Bad Thing

Oil prices continued to fall Friday, amid weaker global demand and increased output in the United States, to the lowest price this year. The cost of a barrel dropped below $60, a decrease of more than 20 percent from its peak last month.

President Trump has credited Saudi Arabia with the falling oil prices. “Thank you to Saudi Arabia, but let’s go lower!” he wrote in a tweet on Tuesday. He called the drop “a big Tax Cut for America and the World.”

But the drop in prices has raised concerns about the international economy, as well as domestic growth in the United States.

While high output in Saudi Arabia has contributed to a decrease in oil prices, experts cite a combination of factors feeding the decline, on both the supply and the demand sides. Record oil output in the United States and exemptions from U.S. sanctions on Iranian oil have pushed up supply. Meanwhile, waning economic growth, coupled with a strong U.S. dollar — which makes oil more expensive for other countries — could be contributing to a decrease in demand.

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