In the same week that the American economy reported meager new job growth, following the economic downturn in the first quarter, Middle Eastern oil producing nations voted to extend the glut of crude on the global market.
Saudi Arabia’s refusal to curtail its output late last year contributed to a drastic drop in oil prices. This action was the biggest obstacle to what would have otherwise been a healthy gain to American energy sector. Instead, hundreds of gas and oil companies folded throughout America from lack of demand. On Friday, OPEC approved the strategy for at least another six months, souring hopes of a reprieve.
After reaching a six year bottom at $45 per barrel, Brent crude has clawed its way back to roughly $70 per barrel. However, OPEC’s insistence on keeping global supply at a higher level serves as a ceiling on prices. Americans will most almost surely see barrel costs under $80 this year.