This past year has seen panic on the market and historic oil lows, both of which have hammered investor confidence in the commodity. Analysts are warning that 2015 could only provide slight relief in what has been a dramatic fall from grace. West Texas Intermediate (WTI) started the year in the $99-per-barrel range and briefly saw gains in in the first six months of 2014, hitting over $105 per barrel in June. Since then it's been nothing but bad news. Brent crude has mirrored its WTI sibling, falling steeply from $112 in June. A key culprit was record shale oil production in the United States, which was initially seen as a good thing, with the US lessening its dependence on the Organization of the Petroleum Exporting Countries (OPEC). OPEC's November decision not to cut oil production led to a further drop in prices and chaos within oil companies. All in all oil prices have sunk roughly 30 percent this year — on Monday, the fuel hit a five-year low of $63 a barrel.
Oil's dramatic price drop.
Commenting on US shale oil production, Patricia Mohr, Scotiabank's vice president and commodity market specialist, said, "the development of those shales has been nothing short of extraordinary. I've been [Scotiabank's] resource economist for a long time and never seen anything like it." She added that work there has contributed to an increase of 1.15 million barrels of oil per day, largely through the utilization of horizontal drilling. "It's been a great thing for the US economy," she said. "But recently it's essentially destabilized the world oil market."