Oil Crashes 19% as American Crude Hits Four-Year Low
Crude just hit a cold streak that no refinery can fix. Oil prices have plunged to their lowest level since Feb. 2021, with US futures closing at $56.99 a barrel — down 19% year-over-year. The slump comes amid swelling global inventories, record US output, and OPEC’s move to ease production cuts.
- While motorists celebrate gas prices dropping below $3 per gallon in states like Texas and Michigan, global benchmark Brent crude fell to $61.06 per barrel — its lowest since May.
- BPBP and TotalEnergiesTTE have cut share buyback programs amid the slump, as analysts warn most oil firms need $70–$90 per barrel to sustain shareholder return levels.
The supply paradox: Despite having 63 fewer drilling rigs than a year ago, US producers haven’t slowed output — thanks to efficiency gains and contracts tied to natural gas and propane. Meanwhile, analysts at Wood Mackenzie predict most firms will halt buybacks if prices drop below $50 a barrel. With the IEA forecasting the glut will expand in the coming months, energy companies confront what Bank of America calls the “capital allocation trilemma” — balancing shareholder distributions, balance sheet health, and reserve investments.