A barrel of oil goes for about $39 right now:
Oil fell below $37 a barrel on Thursday, after new data showed OPEC is still pumping like there is no tomorrow.
The mighty oil cartel produced 31.7 million barrels a day in November, its latest monthly report shows. That is the highest output in over three years and 1.7 million barrels a day over its former production ceiling.
Oil hasn't been this cheap in a long time. About a year and a half ago, it was $108 a barrel.
The implications of this probably aren't well understood. There are a number of countries--Iran, Venezuela, Mexico, Nigeria, and Saudi Arabia that face unique circumstances at home. They have restive, unhappy populations that are trying to live in struggling economies. The governments of those nations (only Mexico is a non-OPEC state) are forced to chase revenue and produce oil in abundance, working against their common interests in the name of maintaining a revenue stream that is drying up.
If those countries come apart at the seams because of cheap oil, we'll have interruptions in supply and the possible intervention on the US military as a result. Sure, I like paying less than $2 for a gallon of gas, and I laugh about it all the time because what else could be more hilarious, but there are some really difficult choices here. Do we continue to live like this and hope the oil producing states can remain stable or do we welcome a modest price hike? It would seem to me that someone has to figure out how to cut production, bring the price up, and do this quietly.