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Prices for U.S. crude fell more than 5 percent today, to less than $34 a barrel. And if that sounds really low to you, you're right. Oil prices haven't been that low in years. NPR's John Ydstie has more.
JOHN YDSTIE, BYLINE: There were lots of reasons that oil prices fell sharply today. Fadel Gheit, an oil expert at Oppenheimer & Co. says, one factor was more evidence of a slowdown in China.
FADEL GHEIT: The economy is growing at a slower pace, and energy efficiency continue to pick up.
YDSTIE: And slower growth and greater efficiency means less demand for oil from a big consumer. And while global demand is weak, there's a glut of oil worldwide. A report today showed a big jump in U.S. stocks of distilled oil products like gasoline and diesel fuel. That surprised oil traders and sent crude prices sliding. Fadel Gheit says the broader context for the drop in oil - from more than a $100 a barrel a year and a half ago to just under $34 today is the U.S. shale oil boom.
GHEIT: Our shale production is 4.5 million barrel. For people to understand what that means, it is double the production of Kuwait.
YDSTIE: Gheit says that huge addition to global production has disrupted the OPEC cartel forever. Instead of cutting production to support prices, OPEC's leader, Saudi Arabia, is pumping freely to try to drive U.S. shale producers out of business.
GHEIT: There will be an industry shakeout.
YDSTIE: But the U.S. industry has proved more resilient than expected. Gheit says oil could go lower before it ultimately returns to sustainable levels of between $60 and $75 a barrel.
John Ydstie, NPR News, Washington. Transcript provided by NPR, Copyright NPR.