Global crude oil demand trends are driven largely by economics. Economic downturns around the world have resulted in reduced oil consumption, which caused crude oil benchmarks to fall. Historically, global crude oil supply trends were dominated by the Organization of Petroleum Exporting Countries (OPEC). OPEC meets annually in March and September to evaluate global economics and crude oil demand and to set pricing and production levels. On Nov. 27, 2014, OPEC voted not to reduce oil production by member countries despite a drop in crude oil benchmark prices.

Additionally, oil prices have recently been altered by the increase in oil production in the United States. The U.S. is the world’s largest producer of natural gas and produces more oil than any other country except Saudi Arabia.

Utilizing recent technological and engineering advances, oil producers in the U.S. have successfully combined multilateral horizontal drilling techniques with high pressure, high volume, multi-stage, slick-water fracking to recover resources from geologic formations known as “unconventional resources” that were formerly uneconomic producers. Further, depths that were previously out of reach are now in production, as wells reaching 10,000 feet and greater are routinely drilled. As a result, the U.S. has added 4 million new barrels of crude oil a day to the global market and that number is expected to increase.

Until very recently, the U.S. oil boom had little effect on global energy prices. But, in mid-2014, oil demand in the U.S., Europe and Asia began decreasing at the same time political conflicts in key overseas oil regions lessened thereby increasing the supply. This combination of weaker demand and rising supply caused prices to start dropping from their June peak of $115 a barrel down to around $80 a barrel by mid-November.

Energy analysts speculate that Saudi Arabia and other top producing OPEC members move to cut oil prices in November rather than to decrease production was intended to damage its competitors, including the United States’ booming shale oil industry. By mid-December, prices had dropped to $60 a barrel.

OPEC has engaged the U.S. in a price war since it is cheaper to pump oil in the Middle East than to extract oil from shale formations in the U.S. As the price of oil keeps falling, some U.S. producers may find extraction unprofitable. Some analysts have concluded that U.S. oil producers can tolerate a drop in crude prices to as low as $50 per barrel before ceasing production before prices begin to stabilize. The future price of oil is more uncertain than ever.