Crude oil prices may not see a retreat until later in the quarter as fuel prices continued their downward slide on Monday from a glut in supply and weakness in the global economy. The continued weakness in crude oil prices has been a boon to consumers who are facing stagnant wages and higher food prices and health care costs. Of course, this trend negatively affects states where oil production is a major contributor of jobs and tax revenue.
While low gasoline prices won’t last forever, there is “still more downside to the market in the first quarter,” said Bruce Bullock, director of the Maguire Energy Institute at Southern Methodist University’s Cox School of Business in Dallas. “Demand for oil globally usually reaches a low in the first quarter, so I don’t anticipate a low price being reached until late first quarter or early second quarter of 2015,” he said.
Crude oil prices are reaching the “bottom currently,” after reaching record lows during the past six months, said Chris Faulkner, CEO of Breitling Energy, a Dallas oil and gas exploration and production company. “We may have some room to slide toward $45 and test that number, but I don’t think we will break through $40,” he said.