An Exxon station gas price sign in Manassas, Va.
An Exxon station gas price sign in Manassas, Va. - 
Listen To The Story
Marketplace

TEXT OF STORY

Scott Jagow: No price is dropping faster than oil. Consider this: In July, the price of oil was $147 a barrel. This morning, it's half that -- $72. More from Ashley Milne-Tyte.


Ashley Milne-Tyte: Consumers and businesses started to cut back on their use of oil when prices shot up. It was then that demand began to weaken.

Daniel Yergin is author of The Prize: The epic quest for oil, money and power. He says even before the big run-up in crude prices, the economy was faltering. And now:

Daniel Yergin: The great global economic growth that propelled oil and other commodity prices up for five years is over.

But he says it's not just global demand that influences oil prices:

Yergin: You know, the financial markets have come to be a very important part of the oil markets. And as hedge funds liquidate their positions, as they stop trading commodities, that is clearly one of the factors in the oil price.

Some blamed speculators for driving the price of oil to records. Yergin says many of those traders are less active, and others have disappeared from the market altogether.

In New York, I'm Ashley Milne-Tyte for Marketplace.

“I think the best compliment I can give is not to say how much your programs have taught me (a ton), but how much Marketplace has motivated me to go out and teach myself.” – Michael in Arlington, VA

As a nonprofit news organization, what matters to us is the same thing that matters to you: being a source for trustworthy, independent news that makes people smarter about business and the economy. So if Marketplace has helped you understand the economy better, make more informed financial decisions or just encouraged you to think differently, we’re asking you to give a little something back.

Become a Marketplace Investor today – in whatever amount is right for you – and keep public service journalism strong. We’re grateful for your support.