Lex Anteinternet: Lex Anteinternet: Lex Anteinternet: And the band p...: Today the price of oil actually declined below $40/bbl. This is probably temporary, but how amazing.And indeed it did prove to be temporary, but perhaps signalling how down in the dumps and perhaps permanent these price depressions may be (as in economic permanent, that is long term), a jump in the price to $45-$47/bbl was due to Saudi Arabia sending troops into northern Yemen in order to keep rebels there from consolidating their forces. So it's regional instability in the Middle East, with a major oil producer, i.e., the one keeping the price low, that's caused the price to jump.
On the other hand, it turns out that Ecuador has been producing oil below its cost. It's oil has been selling for $30/bbl, and they only break even at $39/bbl. Its crazy for them to sell it at that cost, but there must be some internal economic reason for them to keep selling it at a lost. In most real free markets, they'd shut their wells in. Perhaps they will, and indeed, they'll have to, resulting in taking that oil off the market for a time.