Oil prices just fell below $27 a barrel

Oil Prices continue to slide

Oil prices are continuing to drop, falling a dramatic 4% on Thursday to end below $27 a barrel. The last time oil dropped below $27 was in 2003.

While oil price decreases equal savings at the pump for American consumers, it has also wreaked havoc on global financial markets. Investors worry that the energy market, which relies on higher oil prices, will continue to layoff workers and claim bankruptcy as oil continues to crash.

Since reaching new highs of $108 in June 2014, crude oil has plunged an incredible 75%

It’s not just US markets reeling from oils massive losses. The Hang Seng (HSI) dropped nearly 4% Thursday, while the Nikkei (N225) shed 2.3%.

Major indexes in Europe were trading 2% to 3% lower after Sweden’s central bank pushed its key interest rate further into negative territory at -0.5%.

Dow futures are also trading down by about 300 points, or 1.9%.

Compounding worries was news from the International Energy Agency this week that it expects oil oversupply to grow in 2016.

“With the market already awash in oil, it is very hard to see how oil prices can rise significantly in the short term,” the IEA revealed in its monthly report.

Adding to the international oil glut is Iran, which increased production by nearly 3 million barrels a day in January, up from 80,000 in December when the country was under US sanctions.

Iraqi output reached a record high of 4.35 million barrels a day in January, and shipments from Saudi Arabia have also increased.

Experts had hoped that incredibly cheap oil would push up demand. However, incredible downturns in the global economy have stifled those hopes.

Despite a collapse in the energy sector and the potential for further decreases in oil prices, Fed Chairwoman Janet Yellen reiterated the Fed’s plans to gradually increase interest rates throughout 2016.