There has been a significant drop in energy demand from the US, one of the largest markets in the wake of the recession.
The demand has slowed down in other countries which has forced prices to fall. This is a cause of worry for oil producers. The Organization of Petroleum Exporting Countries (OPEC) has cut growth estimates for 2009. It forecasts demand for crude to fall by about 900,000 barrels a day by next year.
OPEC is planning a meeting on November 18 to take stock of the situation. Some countries are already looking at cutting the oil production as demand is not likely to pick up soon.
As prices fall, the budgets for further drilling operations have to be slashed, as a result, profits also fall.
While oil producers are grappling with the crisis, does this mean good news for consumers and oil marketing companies?
Image: Customers line up to buy gasoline in League City, Texas. | Photograph: Dave Einsel/Getty Images
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