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Crude oil is hitting six-year lows and faces a glut that could run into next year

An oil refinery is viewed from the air in Carson, California.
Reuters/Mike Blake
An oil refinery in Carson, California. Roller coaster of emotions not pictured.
By Melvin Backman
Published Last updated This article is more than 2 years old.

Oil is falling—again.

It started its descent last summer, after OPEC decided to go to war with shale producers. It then perked back up earlier this year after those shale producers took their beating. But now that Iran might soon rejoin the global oil market and demand from China is starting to look weaker than everyone thought, all those gains are gone.

Making matters worse, the International Energy Agency released a report August 12 that said global oil demand is rising again but not enough to counteract the gluts that have hammered energy markets—and they won’t be going away until next year.

Here’s how far oil prices have fallen since the beginning of last year:

That fall has left oil plumbing multiyear lows. West Texas Intermediate, a benchmark for US oil, just fell below $43 for the first time since 2009, while Brent crude is less than 7% from a new six-year low. WTI crude still has a 12% cushion before it hits its lowest point since 2004.

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