U.S. oil drills slow as crude prices drop

Oil prices in the U.S. dropped 3 percent on Tuesday, putting U.S. crude at $76.45 a barrel. That’s the lowest price since October 2011, according to Reuters.

The price of oil around the world has fallen more than 25 percent since June. On Monday, Saudi Arabia raised the price of oil for Asia and Europe, but cut the price for the U.S. Analysts believe the drop in price is direct strike at U.S. oil producers.

As of last week, U.S. oil producers announced plans to reduce or withdraw production. ShellOil plans to cut spending and eliminate jobs in its U.S. operations, citing weak results from shale operations. On Thursday, ConocoPhillips announced it would scale back drilling in the Rocky Mountains and the Permian Basin in West Texas.

The slump means a plummet in the stock market. Energy stocks in the Standard and Poor’s 500 index dropped 2.3 percent, Bloomberg reports. But consumers win, putting gas prices below $3 a gallon. It’s also meant big gains for airlines, for whom oil makes up a large portion of operating costs.