By Clifford Kraus, The New York Times, November 2, 2014
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| Recent prices at the pump in Chattanooga, Tennessee, Photo: John Rawlston, NYT, via AP |
HOUSTON — The benchmark American oil price fell below the symbolic $80-a-barrel threshold on Monday, swooning to two-year lows, after Saudi Arabia aimed to shore up its dwindling exports to the United States by cutting its selling price for the American market.
The Saudi move and the deepening fall in oil prices are both symptoms of the oil-drilling boom in the United States, which has lifted production by more than 70 percent over the last six years and reduced the nation’s imports from OPEC producers to roughly half of what they once were.
The lower oil prices are bringing relief to consumers at the pump in time for the holiday shopping season. The national average price for regular gasoline has fallen below $3 a gallon for the first time in four years, and experts say it could easily drop 25 cents more over the next month.
A sustained drop in oil prices could also eventually affect investments in domestic drilling. Most analysts do not think the rise in domestic oil production — an increase totaling more than a million barrels a day over the last year alone — will be interrupted anytime soon unless the American benchmark drops to $70 a barrel and stays there for several months. Then less efficient or highly indebted smaller producers would probably have to slow drilling in at least some fields.
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