Let’s be real. As millennials, these are the lowest gas prices we’ve ever seen. What exactly is happening?

American oil producers have been apparently quite successful the last several years. The accelerated use of hydraulic fracturing, or a method commonly known as “fracking”, allows oil to be collected quicker and more efficiently. “Fracking” involves water and other chemicals being injected into the ground in order to bring the oil to the surface.

The economy in Europe is an absolute mess, which has caused the world demand as well as the world supply of oil to decrease. In the United States however, the domestic supply of oil has increased a massive 50 percent, as states like Texas, North Dakota and Oklahoma have doubled their oil production in the past six years.

The oil boom in the U.S. has caused a huge drop in price per barrel of oil. In June of 2014, barrels were going for $115 each. By December, the average had plummeted to $60.

In short, the supply of oil has surpassed the demand, therefore causing prices to drop and rippling out to affect a drop in gas prices as well.

This chart from GasBuddy.com shows just how steep the decline in price has been.

By: Ben Mixon