The world's largest oil reserves
The plunge is rocking the energy world. For many countries that depend on oil sales for income, a drop like this can be catastrophic. Venezuela, which has some of the world's largest oil reserves, is in an outright panic, calling for emergency OPEC action to stem the slide in oil prices.
"It doesn't suit anyone if the price of oil falls below $100 a barrel," Foreign Minister Rafael Ramirez said at a news conference earlier this month. OPEC's next meeting, set for Nov. 27, is widely expected to be very turbulent.
Other oil-producing countries are wondering how long they can tolerate low prices. "The fall in prices is starting to apply considerable pain to producers whose budgets require $100 (a barrel) or higher to remain fiscally balanced," Robert McNally, president of energy consultancy The Rapidan Group, told CBS MoneyWatch. Those producers include Russia, Iran and Iraq, he added.
A report out this week is fueling those worries. The International Energy Agency said if oil prices fell to $80 a barrel, nearly 3 percent of global production could be cut. The agency also said oil demand might rise by only 700,000 barrels a day this year, down from its earlier forecast of 900,000 barrels a day.
Why are prices tumbling? It's a scenario straight out of Economics 101: More supply and less demand.
The extraordinary surge in oil production in the U.S. is partly to blame. America is in a sustained oil boom, driven by an explosion of fracking in North Dakota, West Texas and other parts of the country. The U.S. is now producing some 8.7 million barrels a day, the highest level in decades.