Oil/Gas Prices

I intentionally didn't put this in the controversial or political categories because I'm not trying to see it that way. I just want to learn something about a market I really don't understand.

How did we get from roughly $4/gallon for gas to $1.50 now?

Supply issue? Demand issue?

Is the U.S. producing more oil now?

Is the U.S. using more or less oil?

What direction are we heading?

Thanks ahead of time to anyone that's willing to drop some knowledge.

Easiest answer is a continued glut in supply with a drop in demand overseas.

The U.S. is producing more oil right now than we have in decades -- maybe ever -- mostly thanks to major developments in shale oil drilling through fracking.

International producers -- specifically the OPEC countries (led by Saudi Arabia) -- have declined to cut production in the hopes that they can drive American production down by making the profit margins less gaudy. It's worked to a certain extent. Lots of unused equipment in Texas and the Dakotas right now. But the larger operations are still drilling.

The recent end to oil sale sanctions on Iran has led to a lowering in speculative prices as they're sitting on millions of barrels that are ready to sell.

The economic slowdown in China simultaneously reduced overall worldwide demand as they're a huge user that was suddenly cutting back.

Lots of product, not many people using it. Prices drop.

When OPEC let oil get to $100 they motivated the US and Canada to frack, which is all but ending OPEC. They're literally running out of places to store oil in the US now. Economy concerns in China also drives the price down as well.

I thought this was supposed to be a bad thing.

Lagging indicator of a global recession.

Brazil has been stagnant for a while. China and India have hit the wall. The big 3 global growth economies have 'bubbled out' and the US and Europe have never fully rebounded to back to pre-2008 levels in terms of meaningful GDP.

I like putting 13 galloons in for 20 bucks. But long term this is not a healthy situation for the world-wide economy.

Good reference (though dated - 2009) of who the big oil guzzlers in terms of nations and continents are.

I heard on the news this morning that some 'expert' is expecting gas prices back up over $2/gallon this summer.