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Growing supplies: Saudi Arabia and other OPEC members are pumping more oil. Energy companies are employing cutting-edge drilling technology to ramp up production across the globe. World oil supplies grew on average by 1.35 million barrels per day in the first quarter, and producers should easily meet demand in the coming months. Easing political tensions: The West's nuclear standoff with Iran appears to be cooling off. The threat of conflict
-- and less Iranian crude on the market -- helped push oil prices past $100. But now Iran and the West are planning talks. The price of oil hasn't dropped this much since Dec. 14, 2011, when it fell by $5.19, or 5.2 percent, to $94.95 per barrel. Oil prices may drift even lower in coming weeks, but analysts don't expect a dramatic plunge. World demand, though weaker than predicted, is still expected to set a record this year. While Iran and the West are talking again, similar talks have not led to a resolution in the past. A breakdown in those talks could renew fears of supply disruptions and send prices back up. Unfortunately, while the drop in oil and gasoline prices should help the U.S. economy
-- or at least insulate it from further damage -- it isn't likely to give the economy a major boost, economists say. A 14-cent drop like the one seen recently would save the typical American household $13 over a month. If sustained over a year, that drop would save U.S. drivers about $20 million. "The problems plaguing the U.S. economy are much bigger than the oil price," Dwarkin said.
[Associated
Press;
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