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Crude Prices Relatively Stable Due To Record U.S. Oil Production

Despite the recent under in the Middle East due to the killing of an Iranian commander by the U.S. military, oil prices remained relatively stable.

Even with the recent unrest in the Middle East brought about by the killing of an Iranian commander by the U.S. forces and the retaliation by Iran, oil prices remained relatively stable. West Texas Intermediate (WTI) crude closed at $59.56 a barrel last Thursday at about the same price it traded a month ago.

Previous Middle East crises caused greater disruptions like the one in August of 1990 where Iraq invaded Kuwait that led to the surge of oil prices from $15 a barrel in the same month to $40 a barrel by October. This price was again hit when in February of 2003 the U.S. were gearing up to invade Iraq.

A boom in the U.S. shale oil drilling has somehow severed the ties between major political events and the cost of energy which is quite evident in the recent development between Iran and the U.S. This has been partly the reason for the relative stability of the crude prices. Adding to this stability is the OPEC's decision to cut on production and the global economic slowdown particularly in China and the emerging markets.

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