One chart showing why oil prices crashed last year

 
Jessica Morris
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Higher production helped the United States extend its reign as the world's top oil and gas producer last year, but the growth spurt also contributed to the black stuff's steep decline.

Oil slumped from about $115 per barrel towards the middle of last year, to as low as $45 per barrel in January, and is wavering around $58 per barrel.

The United States' burgeoning shale gas industry was a big factor - however it was also helped by the Organization of Petroleum Exporting Countries' refusal to cut production despite lower prices, and reduced appetites of once ravenous emerging economies like China.

The chart below demonstrates how the United States sped ahead of its competitors for oil and gas production. While it saw a sharp increase last year, the production levels of its rival Saudi Arabia remained unchanged, and Russia suffered an overall slowdown.

(Source: US Energy Information Administration)

"While United States hydrocarbon production over the past several years is directly attributed to its success at exploiting tight oil formations and shale gas, other key factors also acted to keep hydrocarbon production from increasing in Russia and Saudi Arabia in 2014," the US Energy Information Administration said.

"Although Russian petroleum production continued to increase, natural gas production declined because weak European economic growth and a warm 2013-14 winter reduced demand in Russia's primary market for gas exports."

"In contrast to its past actions to raise or lower oil production levels to balance global oil markets, Saudi Arabia did not cut its production in the fall of 2014 despite falling oil prices and growing global inventories of oil as supply exceeded demand. As a result, Saudi Arabia's total petroleum and natural gas hydrocarbon production was nearly unchanged from 2013.

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