Oil's not well, and that's not all good

Holiday travelers may rejoice in lower gasoline prices, but the depression in oil prices threatens to spread in the week ahead.

The benchmark price for American oil is close to its lowest price since 2008. Back then, worries about dwindling demand sent shock waves through the energy market as thousands of people were losing their jobs each month.

Today, it's concerns about too much oil pushing down prices. While demand has built up slowing as the economy has gotten back on its feet, domestic production has more than doubled. Much of that "new" American oil is coming from shale producers pumping oil from wells drilled in the past decade. The glut could push oil to prices not seen since 2003.

The oil supply boom has led to a Republican effort in Congress to drop the 40-year old ban on America selling its oil overseas. Long gone are demands that America become energy independent. U.S. energy companies have been able to sell refined products to foreign buyers, but they can't sell American crude oil unless they get special permission. Buried inside a 2,000-page spending bill is the provision to allow the foreign export of U.S. crude oil.

Throwing out the ban would put American oil into the international market at a time U.S. oil producers are scrambling to find buyers for their product. The effort comes as Iranian oil is destined to hit the global market for the first time in years as sanctions against the country are lifted.

More supply could further depress prices. While it helps Americans at the pump, oil's price drop also tells investors the global economy is not accelerating.

Tom Hudson, financial journalist, hosts "The Sunshine Economy" on WLRN-FM in Miami, where he is the vice president of news. Follow him on Twitter@HudsonsView.

This story was originally published December 18, 2015 at 5:29 PM with the headline "Oil's not well, and that's not all good ."