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World oil prices have dropped by about 30 percent since June. That has helped many economies around the world. When people spend less on fuel, they can spend more on other goods. But lower oil prices also mean reduced profits for national oil companies. Privately-owned oil producers and companies that provide services to the oil industry are also affected. Increased American oil production is one reason for the drop in world oil prices. Hydraulic fracturing technology developed in the U.S. has made that increase possible. 

Mr. Krane says slowing economies in China and Germany have also reduced the demand for oil.

“If you are a small company thinking about investing in putting in some new oil production, well, you might think twice if prices are down at $75...”

U.S. companies are not alone in feeling pressure from falling prices. In places like Houston, Texas, the oil industry is a major employer and economic driver. Economist Patrick Jankowski says lower oil prices have a clear dollar cost.

“If you look at the production that we get in the state of Texas, we are producing 4.5 million more barrels a month than we were doing this time last year. Yet the value of our production in Texas has dropped by over a billion dollars a month.”

However, Mr. Jankowski believes the over-supply will slowly disappear.“By 2016, we will probably see production drop again, definitely by 2017. By then we will see prices go back up again.”He says decreasing prices may make energy company leaders nervous, but most are prepared for it.

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