Behind The Mic With Joe Mathieu: Oil Glut Could Bring Lower Prices
BOSTON (CBS) – We're used to hearing about oil shortages - a finite supply. After all that's why we pay so much money for the stuff.
Crude oil prices have more than doubled over the past decade to well over $100 a barrel this year.
Analysts tend to blame the same factor - tight supplies and rising demand, especially from growing economies like China and India. There's not enough to go around we're told. On the way to realizing "Road Warrior."
But now the unthinkable, as the Wall Street journal reports that supplies have increased so much along the Gulf Coast that we are likely heading for a U.S. oil supply glut.
You read that right.
And the best part is no one saw it coming.
Experts say we can thank the controversial method of fracturing rock with hydraulics – called "fracking" – to strike oil in places previously inaccessible. It means higher production in places like West Texas and North Dakota.
And now, if you can imagine, we're talking about a possible price war in the oil market.
And the declines could be significant in prices for both gasoline and heating oil. But as you know gas stations have a way of taking their time so we may not see lower prices at the pump until early next year.
Funny how it never seems to take as long when prices go up.
Follow Joe on Twitter @joemathieuwbz
