Oil prices are plunging even lower today. WTI crude is down below $50 per barrel for the first time since 2009. That's already down by more than half since the beginning of 2014, a development almost no one saw coming. It begs the question: What is the lowest possible low for oil right now?
One answer — which will terrify countries that are big oil-producers like Russia and Venezuela — is that there's no insurmountable reason that oil couldn't sink as low as just $20 a barrel. It's already been there, after all.
Fifty dollar oil is already having an amazing effect: Russia's ruble has gone through the floor, and that nation is now in an economic crisis because of it, Venezuela is also in a major political and economic crisis, and the tumbling prices are likely to drive the eurozone into deflation soon, if they haven't already. On the upside, almost every advanced economy in the world will enjoy a bit of a growth premium this year, and lower petrol prices should lift consumption. Businesses will likely get increased margins out of lower transport costs, too.
Here's what's happened so far: