Research Brief: Energy – Q1 2016

A substantial increase in supply ignited a steep decline in the price of crude oil over the past year.  U.S. crude inventory has increased more than 20 percent since year-end 2014 and OPEC members continue to pump at elevated levels in an attempt to weaken U.S. producers.  The supply glut and downward price pressure could potentially worsen as Iran ramps up production as sanctions are lifted and the U.S. exhausts storage capacity.  These trends have ruffled global financial markets and posed questions on how deeply problems in the energy sector will affect other segments of the reasonably strong U.S. economy.

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