When crude oil prices plummeted in 2014, most economic observers did not anticipate a long-term depression in oil prices. They predicted that OPEC, whose 14 member nations control about 40 percent of world oil production and more than 70 percent of oil reserves, would make supply corrections that would rebound oil prices above $100 a barrel. However, for three years prices have hovered near $50 a barrel, and no correction is in sight. While this doesn’t bode well for OPEC nations, lower oil prices translate into lower gasoline prices, which have been an economic boon for Nevada consumers and businesses.
OPEC’s influence in the global oil market has been weakened by sluggish worldwide demand and increasing production from other nations, such as the United States and its expanding shale oil operations. In May, OPEC announced another production cutback designed to reduce oil supplies and increase prices. The strategy has not yet had the desired effect as production has climbed in other countries, particularly the United States, which has seen its oil production surge to the near-record levels of two years ago.
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