Last week, U.S. crude oil prices dropped further, falling below $40 a barrel.
According to The Guardian, prices were low all week, at some points reaching depths not seen since 2009. Crude prices settled at $39.86 to close out the week, signifying the eighth consecutive week oil prices have dropped, the longest streak since 1986, according to The Associated Press.
In the past three months, oil prices have dropped 34 percent. Over the course of the past year, that percentage almost doubled, as it was 60 percent higher in the same week of 2014.
Over the week, West Texas Intermediate, a U.S. oil benchmark, also reached a six-year low, settling at $40.80 a barrel. Brent crude faired slightly better at $46.90, The Guardian reported.
A reason for the decrease is likely the unprecedented production levels of U.S. oil companies. According to the U.S. Department of Energy, over four weeks ending on Aug 14, production totaled 9.4 million barrels, an 11 percent increase over the same period of time last year.
In this sense, fracking has been both a blessing and a curse. The current oil boom started in 2008, according to The Guardian. At that time oil prices were just shy of $150 per barrel, which was high enough to make the new technology affordable. This led to a boom in oil production but a drop in prices as demand stalled. The procedure is still going on and production is still high, but there are fewer operational rigs than there have been in prior years.
According to the International Energy Agency, demand is at 1.6 million barrels per day, but global production is far outpacing demand, which averaged at 31.5 million barrels a day last month, the highest level in three years.