Although the crude oil is rarely transported in barrels, it has become significant because it is a standard unit of calculating the price and production throughout the world. In recent years, the oil production has increased astronomically while the global economy has been sluggish and thus creating a huge gap between the supply and demand gap leaving reserves of major nations overflowing with surplus oil. As of today, an oil barrel has hit new lows at 28 $ per barrel making it effectively cheaper than a standard 160-litre barrel!
Or two large pizzas in Manhattan!
Other oil trolls joined in the fray and made it, even more, hilarious:
The price is expected to drive even lower than 20 $ as Iran’s sanctions have been lifted and it can now sell its cheap oil at any price it can get. People are now expecting a major decrease in fuel prices as part of the international slump in crude oil’s value. It is just astonishing to see how much money government and fuel retailers are pocketing in this scenario. A litre of oil still costs around 1.2 dollars in many countries, many times the cost price itself. Is is perhaps the only time in history when retailers are making more money than actual producers!
It may appear satisfying for us that we will be getting cheap gas for our cars; it is actually quite worrying for the global economy as it is very much tied to a balanced oil price. When we have dirt-cheap oil, the stock markets are expected to perform poorly and thus, the whole commodities market also gets affected. But, we can forget about all that for a while and see the poor oil companies scrambling to produce the right amount of oil.