Quote from: cameronpalte on December 30, 2014, 06:49:58 PM

The actual reason why oil prices came down was because of a sharp increase in production by the United States and the North Sea operators which resulted in an oversupply for the market decreasing the price - it's all supply and demand.

OPEC does like the lower prices for now however, (which is why it hasn't cut production yet), because many of the new projects in the US and the North Sea are unprofitable at below $65/barrel so OPEC is hoping that the lower oil price will help drive these projects out of business (a basic monopoly tactic here), which will allow OPEC to control most of the world's oil supply once again.

The high oil prices that we have seen much of the last decade have already caused too much investment into these kinds of projects for them to be completely abandoned. Even if the projects were to be temporarily shut down they could easily resume drilling for oil with much less effort then it cost to build the projects