Oil prices fell another $2 a barrel Monday, extending a slide that began this fall. After peaking at more than $100 a barrel this year, U.S. crude is now changing hands for less than $65 a barrel—a five-year low.
Some oil market watchers say the price drop isn't over, thanks for a boom in U.S. production and a recent decision by market cartel OPEC not to cut production and tighten global supplies. Analysts at Morgan Stanley said that the resulting glut of oil could push prices as low as $43 a barrel next year.
"Without OPEC intervention, markets risk becoming unbalanced, with peak oversupply likely in the second quarter of 2015," Morgan Stanley analyst Adam Longson said.
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Much of that supply is coming from a boom in U.S. crude from producers who are squeezing more oil out of the ground with improved technologies like hydraulic fracking and horizontal drilling. Though the new techniques have breathed new life into the U.S. oil patch, they're not cheap. And a lot of the equipment and manpower needed to produce that oil has been paid for with borrowed money.
That's left some banks holdings those loans—and their investors—looking closely at the increased exposure on their books to suddenly oil lower revenues. A prolonged era of low oil prices could also hit the broader economies of states that rely heavily on the oil industry for jobs and consumer spending, according to analysts at BMO Capital Markets.