I think that it is a question of demand and supply at heart--the same old economic rule!

I think that it is a question of demand and supply at heart--the same old economic rule!

Dear all,

I'm not an economic expert, but I think there are reasons of global politics that are related to an increased economic pressure on Russia.

In my opinion the oil drop is linked to a small private US overproduction that are not policy. The current price according to many experts has no relation to the policies of the country or the oil organizations (OPEC).Note that by the time the oil price does not follow the market supply and demand. By the time the market has a psychological tendency.

Bests regards

FADEL

This is the market function. If the crude oil prices are going down, so, oil prices are behaving downturn.

WelL I agree with supply and demand theory- but that does not answer the question. The answer is simple big oil consumer is now moving towards oil sufficiency through the shale gas. 

I have read that Saudi Arabia is trying to moderate oil prices in OPEC, and that this factor combined with the rise of shale oil is depressing oil prices for the moment. However, at the precise instant that I write, oil prices have taken a small upturn. With this upturn continue?  Or will we continue to see oil prices drop?  I must confess that the rise or drop in oil prices mystifies me. I think the cause is partly political and mostly economic, but I remain uncertain.

We see the consequence of market. And market can mean show law of supply and demand, but also destroy competitioners, show political power.

The only reason is the demand-supply gap.

I think there are reasons of global politics that are related to compete the economic of Russia and Gulf states.

God knows the truth.

Dear Colleagues,

Good Day,

There are no definite answers to these questions. But in thinking about them, it helps to understand what lies behind the price drop. There are three key explanations.

1. The fundamentals in recent months did not support the high price in the first place. Under this interpretation, it was a prolonged bubble that kept OIL PRICEShigh for three and a half years. The bubble was kept inflated by two factors: projections of high future demand in emerging markets, especially China, and expectations of future difficulties in production.

In reality, neither has materialized to the expected extent. Demand has not been as high as was projected, as demonstrated by the falling prices of other commodities. And in spite of a difficult geopolitical situation, production has been higher than many expected, in part due to significant amounts of North American shale coming on stream, with more to come in future years.

2. OPEC is understandably wary about cutting production. Bubbles stay inflated until something happens to burst them – and in this case it was the market’s realization that OPEC would not be the first to cut production in a bid to shore up prices.

This is understandable on OPEC’s part – their fear is that given unfavourable market fundamentals, one cut in production would not be enough to stem the price fall, and further cuts would be needed. But cut too much, and they would merely lose market share to wealthier economies such as North America.

Production will still fall, as oil companies are now making decisions to reduce their capital expenditure, but this will be a slower process. And OPEC may still decide to cut production, but the fact that they wouldn’t make the first move helps explain why the price has fallen so much.

3. Traders are playing a growing role in the oil value chain. In the past few years, traders have moved beyond trading and into the oil and gas value chain, taking significant positions in the storage of oil and also in the upstream and downstream sectors.

Please, see the following links too.

http://www.vox.com/2014/12/16/7401705/oil-prices-falling

http://ourfiniteworld.com/2014/12/07/ten-reasons-why-a-severe-drop-in-oil-prices-is-a-problem/

http://www.bbc.com/news/business-29643612

http://www.khilafah.com/index.php/the-khilafah/economy/20503-qaa-causes-for-the-sudden-decrease-in-oil-prices

http://oilprice.com/Energy/Oil-Prices/The-Simple-Reason-For-The-Oil-Price-Drop.html

I agree that ultimately it is the basic demand and supply story.

The oil prices are not truly a function of market  forces of demand and supply.

The producer governments intervention in keeping the supply high and the market forces in keeping the demand low have resulted in a drop so high.

I feel that somewhere the search for alternative energy to oil will have an impact on oil prices in the long run. 

Dear all,

I'm not an economic expert, but some time ago I read this enlightening news on the Economist.

http://www.economist.com/blogs/economist-explains/2014/12/economist-explains-4

Hope this is useful.

mariano

I think the cause is  political  situation  than economic.

I think the current oil price fluctuation is more to with politics than economics.

Dear all,

as others said ,

I think that this a political process... Saudi Arabia is trying to pressure other countries in OPEC with decreasing oil price and monopoly the oil business. I am not an expert in political process but i think it's time for whole world and for all countries to find another source power which is reproducible... 

 I agree with many answers ,hope this link may be useful:

Seven Questions About The Recent Oil Price Slump

http://blog-imfdirect.imf.org/2014/12/22/seven-questions-about-the-recent-oil-price-slump/

It could be the basic demand and supply story or possibly more of a   political  situation  than economic.

Economics cannot be separated from politics; and politics cannot be separated from economics. One provides the context for the other.

Assume oil price continues to decline, should we anticipate the fall of inflation throughout the world? Probably not, at least not for household goods, i.e. food prices. One hamburger will still cost $2 and a bottle of shampoo would still maintain its same price. The headline inflation will not be affected. The core inflation may be affected. However, the for 90% of the people, it is household inflation that matters. For example, for an person in India with per capita GDP of $1,500 or $4.10 per day would still have the same purchasing power to buy the same basket of goods in India despite the falling of oil price. If the general price level would fall as the result of falling oil price, then we should expect $4.10 to buy more basket of goods---in practice, that has never been the case. The connection between macro-level and micro-level exists, but the distance remains too remote to be felt.

Will decline in oil price contribute to increase profit of producers? If price level does not change, with decrease in input price, this is the most likely outcome.

Demand is low because of weak economic activity, increased efficiency, and a growing switch away from oil to other fuels. Second, turmoil in Iraq and Libya—two big oil producers have not affected their output. Thirdly, America has become the world’s largest oil producer. Though it does not export crude oil, it now imports much less, creating a lot of spare supply

Thank you Sanjeev for your useful contribution to my question above.

Dear @Pahlaj, I was taking part in some good threads with excellent responses about oil, oil prices, global politics, oil market... Please, do find attached some of those fine threads that  may help to this issue you have raised!

https://www.researchgate.net/post/Can_we_expect_decreases_in_gas_prices_following_the_fall_of_oil_prices_on_global_market

https://www.researchgate.net/post/In_your_view_do_we_face_a_new_global_crisis_or_global_economy_growth_due_to_fall_of_oil_prices

https://www.researchgate.net/post/Will_the_last_decline_in_oil_prices_lead_to_formation_of_a_new_oil_world

https://www.researchgate.net/post/In_your_opinion_what_if_we_reach_beyond_the_peek_oil_which_energy_could_replace_it_as_the_connective_tissue_in_the_economy_and_in_the_world

Two main reasons:

• the strong tend to substitute petroleum with sand-oil and shale-oil (cost of alternative oils: ~$75/barell)
• the "need" to "hit" Russia (cost of russian oil: ~$57/barrel)

I agree with Dear Hazim Hashim Tahir.

Very interesting question.

The recent drop in crude oil and gasoline prices in the United States is a nice stocking stuffer for consumers this holiday season, but it could turn into a lump of coal.

A global oil glut has caused the spot price of benchmark crude to fall from US$133 a barrel in 2011 to a five-year low of US$63 a barrel this week. That has cut the average weekly price of regular gasoline from US$3.91 a gallon to about US$2.66 over the same period.

http://www.bloomberg.com/energy/

http://theconversation.com/oil-price-drop-offers-short-term-gains-but-long-term-pains-34944

According to you, how much OPEC give this market to bring down oil prices,  result of their philosophy on the market or a result of certain agreements with geopolitical motives?

Dear All

In brief.......I  suggest that it is about political economic matters.......

Maybe the answer to Darko's question may be found here, links follow! OPEC's surprising response: Let prices keep falling! "...OPEC couldn't quite agree on a response and ended up keeping production unchanged. "We will produce 30 million barrels a day for the next 6 months, and we will watch to see how the market behaves," said OPEC Secretary-General Abdalla El-Badri after the meeting.

That caused the price of oil to start crashing even further. The price of Brent crude went from $80 per barrel to $70 per barrel in just a few days. And it kept tumbling to down below $60 per barrel by mid-December and $50 by January.

For all intents and purposes, OPEC is now engaged in a "price war" with the US. What that means is that it's relatively cheap to pump oil out of places like Saudi Arabia and Kuwait. But it's more expensive to extract oil from shale formations in places like Texas and North Dakota. So as the price of oil keeps falling, some US producers may become unprofitable and go out of business. And the price of oil will stabilize. At least that's what OPEC members hope..."

http://www.vox.com/2014/12/16/7401705/oil-prices-falling

Dear Ljubomir Jacić, and Hazim Hashim Tahir,

Thank you very much for your very detailed answers and the useful links.

Overproduction is the first reason. 

What led to overproduction and glut?

Increase in production of what used to be fringe sources, like fracked petroleum and gas.

Governments and firms financed this overproduction.

Conservation of energy and the rise of alternative sources of energy rose.  The OECD states and countries like China increased alternatives.

Where I live now, Oman, has one of the lowest inflation rates of the past few years.  Diversification of economy is ongoing but slow.

The USA, where I am from, has also had low inflation--some related to fuel prices going down.

However, in some countries--like the Philippines (where my wife and daughter are from)-- fuel prices are seldom permitted to go down and the government does little to force prices down as they should be going down in a  relatively free market. 

https://eslkevin.wordpress.com/2015/03/15/big-oils-broken-business-model-the-real-story-behind-the-oil-price-collapse/

I added this explication of my argument against the simple supply and demand example that for some reason has found too much acceptance here:  In the short article I reiterate a bit on what I stated above but make a much clearer argument for  theory of monopolistic competition in markets, which most students are trained in these days.

by Kevin Stoda, Oman

Saudi Arabia, which had contributed to glut through over-production while underselling fracked oil and and other costly petroleum commodities, recently has gone to war with Yemen. This led to a slight jump in oil prices and likely inflation elsewhere where the so-called free-market is allowed to reign.

NOTE: Monopolistic competition is a type of imperfect competition such that many producers sell products that are differentiated from one another (e.g. by branding or quality) and hence are not perfect substitutes.

The reason I use the term "so-called capitalism" (above) is because nowadays terms, like monopolistic or monopoly-like economics, better explain most political economics and how they (economies of states and regions) function in terms of intra-state, interstate, regional and global activity. In short, in many cases either monopolistic economics, or monopolistic competition, or actual monopolies--especially national and multinational ones--do indeed determine price and manipulate effects in the markets, especially in terms of petroleum.

For example, Oman--which pegs its rial (currency) to the dollar--actually runs a monopolistic competition at the gas pump by offering different name brands a seat at the table--Shell and various national gas firms are found here offering fueling services to drivers. However, as it functions, the government controls oil prices here--at a higher rate at the pump than do neighboring countries, like Saudi Arabia and Kuwait. This is fine policy because for both Oman (and Saudi), keeping inflation stable is important. Price fluctuations in oil affect every part of our lives.

Deflation and inflation are to be avoided. So, here in many GCC states it is "spend & spend" initiatives that are continued on the home front; i.e., purchases for national concerns, like education, defense, and infrastructure or services, are continued at a much higher level than in the USA.

In short, when Saudi oil prices go down, so do Omani oil prices--but this does not occur much at the local gas pump. The gas price at the pump is still pegged higher in Oman than Saudi and Kuwait--as it was last year and the year before. This is due to government regulations and due to other companies in the "monopolistic competition market" following the lead of the previously-government-owned-rules for trading and doing business. (The government is signalling that fluctuation of prices is bad for Oman. Shell and others therefore have a higher profit in Oman than their counterparts in other GCC countries.)

A similar phenomenon occurs in the Philippines, which, unlike Oman, has only a small supply of homegrown crude oil in production. That is, prices only rarely go down even if their is a global gut in oil. The government does nothing to force the oil price down as mostly only a few oil firms function throughout most of the country--allowing them edges in the "monopolistic competition market".

In contrast, in the USA, where politics strongly desire the price of oil to stay down for short-term political economic reasons, the larger (more capitalistic competition) market in the USA follows (1) the signalling from Washington but all the while (2) looks forward to the next geo-political explosion in the Middle East (or elsewhere) as an excuse for market hysteria and another boom in price--hence a boom in the petroleum-production sector.

Especially, as Wall Street stocks have continued to rise, the USA economy loves deflation in the oil sector so as to avoid overall inflation in the country to remain small. In short, the somewhat stagnant USA economy is bolstered by low oil prices--i.e., the area that affects the average American's pocket much more greatly than it does in other lands, like Oman, Saudi Arabia, and even the Philippines (where transportation costs are lower through high levels of cheaper shipping transport and shorter distances traveled per person annually).

The USA participants in the monopolistic market are not the only ones who are ready to manipulate prices. Currently, the plan of Saudi Arabia continues to be: Saudi, "[t]he biggest exporter [of petroleum], has let prices plummet--delaying the day when climate concerns, efficiency, and fuel switching break the world's dependence on crude."

This evidence of monopoly-like behavior is present in the petroleum sectors throughout the world. Also, destruction of infrastructure through war or whatever means can raise prices in a pinch even in a glut if fear is present.

However, currently, Saudi is so committed to slowing down the globe's movement toward using and creating alternative-energy sources that it tries to maintain cheap oil even as war ravages its neighborhood and causes instability for others in the region (Middle East or elsewhere in the region). This contrasts with its oil policy some years ago, when prices were allowed to rise globally during USA invasions of Afghanistan and then Iraq.

Read more here: Mystery Behind Dropping Oil Prices Solved: Concerted Market Manipulation

Dear All.

A dear researcher on this thread expressed appreciation, about two weeks ago, for anything I can contribute to this thread. Firstly, I apologize for just responding now. Secondly, I am an expert only in smart technology systems. By smart, I mean, technologies that helps to reduce pollution and improve the Green World. Thirdly, in my opinion and from years of observatory studies, I think humanity should start getting ready for a NO-OIL World System. The indications are all around us. Most likely, in the next ten years, oil and its derivatives might ONLY be needed for lubrication and NOT for power generation. My publication, The BPG, is about a system with smart technology embedded. So, invariably, the price of oil will most likely still fall further low. Though, there is a byproduct of oil that might become very valuable. Someone told me over twenty years ago about this byproduct called < Glycoal >. An not sure about the spelling. I was told that it is as liquid as water even at 0 degree Celsius. I am not sure much is known about this oil byproduct today, just like the Lorenzo's Oil back in the fifties. So, when one door closes, another one is already opened.

Thanks All.

I believe it's geopolitical maneuvering and am persuaded by Max Keiser and Stacey Herbert and Cross Talk on Russia Today (RT) of this. But I'm a complete economic ignoramus. 

Some possible reasons behind reduction in oil price may be:

1. Supply is more than demand

2. Less or negligible import by USA

3. Geo-political issues

Watch RT's Boom Bust programme for 3. from Subhash.

Just for remembering : After the Fall: The Politics of Oil! Fine analytical article dated 1986. "The question now is not whether a price collapse will create a new form of politically motivated intervention in the oil market by governments. The question, rather, is whether governments can take the necessary measures to reorient the petroleum sector in a manner compatible with all interests, guard their vested interests, and not create new impediments to market efficiency through which participants in the oil market will lose." 

Things are happening on a cyclic manner!

http://www.foreignaffairs.com/articles/40806/edward-l-morse/after-the-fall-the-politics-of-oil

I really appreciate getting views that don't come from the West.

There was a bubble in the futures market for Oil, People invested in the assumption that oil prices would stay high when oversupply due to shale oil created too much supply to meet the demand. One factor that blocked high demand especially in the West, was the refusal of coastal populations to make it easy to ship oil to China by pipelining crude to the coast and loading it on tankers. Attempts to ship crude by train, were abortive due to some spectacular crashes wherein the oil lit on fire.

by Kevin Stoda, Oman

Saudi Arabia, which had contributed to glut through over-production while underselling fracked oil and and other costly petroleum commodities, recently has gone to war with Yemen. This led to a slight jump in oil prices and likely inflation elsewhere where the so-called free-market is allowed to reign.

NOTE: Monopolistic competition is a type of imperfect competition such that many producers sell products that are differentiated from one another (e.g. by branding or quality) and hence are not perfect substitutes.

The reason I use the term "so-called capitalism" (above) is because nowadays terms, like monopolistic or monopoly-like economics, better explain most political economics and how they (economies of states and regions) function in terms of intra-state, interstate, regional and global activity. In short, in many cases either monopolistic economics, or monopolistic competition, or actual monopolies--especially national and multinational ones--do indeed determine price and manipulate effects in the markets, especially in terms of petroleum.

For example, Oman--which pegs its rial (currency) to the dollar--actually runs a monopolistic competition at the gas pump by offering different name brands a seat at the table--Shell and various national gas firms are found here offering fueling services to drivers. However, as it functions, the government controls oil prices here--at a higher rate at the pump than do neighboring countries, like Saudi Arabia and Kuwait. This is fine policy because for both Oman (and Saudi), keeping inflation stable is important. Price fluctuations in oil affect every part of our lives.

Deflation and inflation are to be avoided. So, here in many GCC states it is "spend & spend" initiatives that are continued on the home front; i.e., purchases for national concerns, like education, defense, and infrastructure or services, are continued at a much higher level than in the USA.

In short, when Saudi oil prices go down, so do Omani oil prices--but this does not occur much at the local gas pump. The gas price at the pump is still pegged higher in Oman than Saudi and Kuwait--as it was last year and the year before. This is due to government regulations and due to other companies in the "monopolistic competition market" following the lead of the previously-government-owned-rules for trading and doing business. (The government is signalling that fluctuation of prices is bad for Oman. Shell and others therefore have a higher profit in Oman than their counterparts in other GCC countries.)

A similar phenomenon occurs in the Philippines, which, unlike Oman, has only a small supply of homegrown crude oil in production. That is, prices only rarely go down even if their is a global gut in oil. The government does nothing to force the oil price down as mostly only a few oil firms function throughout most of the country--allowing them edges in the "monopolistic competition market".

In contrast, in the USA, where politics strongly desire the price of oil to stay down for short-term political economic reasons, the larger (more capitalistic competition) market in the USA follows (1) the signalling from Washington but all the while (2) looks forward to the next geo-political explosion in the Middle East (or elsewhere) as an excuse for market hysteria and another boom in price--hence a boom in the petroleum-production sector.

Especially, as Wall Street stocks have continued to rise, the USA economy loves deflation in the oil sector so as to avoid overall inflation in the country to remain small. In short, the somewhat stagnant USA economy is bolstered by low oil prices--i.e., the area that affects the average American's pocket much more greatly than it does in other lands, like Oman, Saudi Arabia, and even the Philippines (where transportation costs are lower through high levels of cheaper shipping transport and shorter distances traveled per person annually).

The USA participants in the monopolistic market are not the only ones who are ready to manipulate prices. Currently, the plan of Saudi Arabia continues to be: Saudi, "[t]he biggest exporter [of petroleum], has let prices plummet--delaying the day when climate concerns, efficiency, and fuel switching break the world's dependence on crude."

This evidence of monopoly-like behavior is present in the petroleum sectors throughout the world. Also, destruction of infrastructure through war or whatever means can raise prices in a pinch even in a glut if fear is present.

However, currently, Saudi is so committed to slowing down the globe's movement toward using and creating alternative-energy sources that it tries to maintain cheap oil even as war ravages its neighborhood and causes instability for others in the region (Middle East or elsewhere in the region). This contrasts with its oil policy some years ago, when prices were allowed to rise globally during USA invasions of Afghanistan and then Iraq.

Read more here: Mystery Behind Dropping Oil Prices Solved: Concerted Market Manipulation

http://www.opednews.com/articles/In-your-opinion-what-are-by-Kevin-Anthony-Stod-Business_Competition_Deflation_Economics-150415-359.html

http://www.globalresearch.ca/mystery-behind-dropping-oil-prices-solved-concerted-market-manipulation/5430117

Forecast of costs and prices vary

http://www.spe.org/industry/docs/OGR_Mapping.pdf

Some times, market function operations become temporarily defunct and geo-politics and ego of the some powerful countries may be playing bigger role.

This is complicated question though is supply and demand

Earnings are down for companies that have made record profits in recent years, forcing them to decommission rigs and sharply cut investments in exploration and production. More than 100,000 oil workers have lost their jobs, and manufacturing of drilling and production equipment has fallen sharply.

The cause is the plunging price of a barrel of oil, which has been cut roughly in half since last June, reaching levels last seen during the depths of the 2009 recession.

OPEC likely to keep oil prices low amid signs strategy is working!

http://calgaryherald.com/business/energy/opec-likely-to-keep-oil-prices-low-amid-signs-strategy-is-working

A cartel of sorts, supply creates/deflates its own demand. Creating "expansionary disinflation" in the US. While the real wages may seem to have risen with lower cost- push inflation levels (playing off lower oil prices), the net income of household may still be falling as governments struggle to compensate for fiscal deficits and rising sovereign debts through increased taxes and slashed subsidies.

As to other "causes"... with sluggish performance in most world economies, the demand for oil and energy as a whole will be dampened, this is another reason why oil prices is likely to remain subdued. The alternative energy market is also picking up, mainly in the developed nations. So there is likely to be more volatility in oil prices in the near future as the structure of the oil and energy market changes fundamentally. 

http://www.forbes.com/sites/jonhartley/2015/01/12/the-economic-impact-of-declining-oil-prices-expansionary-disinflation/

Thank you, Shian-Loong Bernard Lew, for your meaningful answer and the up-loading the reference.

Regards

Pahlaj

Dear Colleagues,

Good Day,

This is another view point  by:  JESSICA MENTON - Here are four main factors driving oil’s sharp decline during this week:

1. Strong U.S. Dollar.

2. OPEC: U.S. Output Could Take Hit.

3. A Global Oil Glut.

4. Iran Nuclear Deal Could Add to Oversupply.

Please, see the original article for details... 

http://www.ibtimes.com/why-are-oil-prices-falling-here-are-four-reasons-crude-prices-continue-trend-lower-1848742

Economic slowdown put demand down. Producers do not colaborate to keep price up with production costs. Countries in the gulf, like saudi Arabia can afford to produce at very low prices. Finally, projections on furure teserves show no shortage.

Prices depend on supply, reserves and demand + politics (such as OPEC) if producers  collaborate ir not. I leave it to conspiracy theorists  why they do or not collaborate.

One of the biggest economic surprises of 2015 is that the stunning drop in global oil prices did not deliver a bigger boost to global growth. Despite the collapse in prices, from over $115 per barrel in June 2014 to $45 at the end of November 2015, most macroeconomic models suggest that the impact on global growth has been less than expected – perhaps 0.5% of global GDP.

http://www.project-syndicate.org/commentary/oil-prices-global-growth-by-kenneth-rogoff-2015-12

SPECULATION. But real answer is only known by the real big FEW GUYS at the top. The general public including myself is just getting a free brain wash to look away from the REAL REASONS why.

May be there is something alot cheaper/comptetive on the horizon?

best wishes, Refik

In India, inspite of the drop in prices, Kerosene is sold through the Public Distribution System, the main function of which is to provide subsidized food to the poor. In addition to limiting subsidized LPG to six cylinders a year, the petroleum ministry is piloting a biometric scheme for distribution of subsidized LPG. These new government programs, allows the eligible consumers to recoup LPG and kerosene subsidies via the Aadhaar platform

Dear Colleagues,

Good Day,

Here is a new article (dated January 6, 2016), entitled "Oil Prices: What’s Behind the Drop? Simple Economics", published in The New York Times:

...."Why has the price of oil been dropping so fast? Why now?

This a complicated question, but it boils down to the simple economics of supply and demand.

United States domestic production has nearly doubled over the last six years, pushing out oil imports that need to find another home. Saudi, Nigerian and Algerian oil that once was sold in the United States is suddenly competing for Asian markets, and the producers are forced to drop prices. Canadian and Iraqi oil production and exports are rising year after year. Even the Russians, with all their economic problems, manage to keep pumping.

There are signs, however, that production is falling in the United States and some other oil-producing countries because of the drop in exploration investments.

On the demand side, the economies of Europe and developing countries are weak and vehicles are becoming more energy-efficient. So demand for fuel is lagging a bit.

Who benefits from the price drop?

Any motorist can tell you that gasoline prices have dropped. Diesel, heating oil and natural gas prices have also fallen sharply. Households are likely to spend $750 less on gas this year because of the oil prices, the United States Energy Information Administration said in January. Europeans and consumers around the world will enjoy similar benefits.

The latest drop in energy prices — regular gas nationally now averages around $2.03 a gallon, down about 19 cents from a year ago — is also disproportionately helping lower-income groups, because fuel costs eat up a larger share of their more limited earnings.

Gasoline prices are now inching down as refineries finish their maintenance to switch to more inexpensive winter gasoline blends."...

Please read the rest of the article....

http://www.nytimes.com/interactive/2016/business/energy-environment/oil-prices.html?_r=0

Dear Colleagues, 

Good Day,

"The Top 6 Reasons Oil Prices are Heading Lower   -  by : STEVE AUSTIN for OIL-PRICE.NET, 2015/05/07

Here are the top 6 reasons that savvy speculators should continue to short crude oil.

1. Iran Returns.

2. Fracking is Not Going Away.

3. OPEC is Idle.

4. Russia Produces More.

5. ISIL's Days are Numbered.

6. No Demand.

The major oil producers have done nothing to cut production since October 2014, and they are unlikely to consider cutting output any time soon. The USA, Russia and Saudi Arabia each have different reasons to continue high output, but all three are just stockpiling oil because they cannot find enough immediate buyers. Add on the inevitable return of Iran and Libya and the prospects of the 2 million bpd excess production in the world reducing can be seen to be impossible.

Monetary tightening will reduce world growth and remove asset price inflation. Lower growth, coupled with lower need for oil through efficiency and environmentalism, means demand for oil is not going to exceed supply for a long time to come. The oil price is not going to rise any time soon.

please, see the article...

http://www.oil-price.net/en/articles/top-6-reasons-oil-price-are-headed-lower.php

Dear all,

Warm greetings from Cambodia !

Thank you for uploading updated news and situation on this thread. All the references, your views and explanations are very helpful.

Kind regards

Pahlaj

I think it is realistic to expect an increase in the price of oil, because it arises from the need of exploration and discovery of oil in geologically complex structures. Analytical market indicators show the assessment of the expected oil prices for some 3-5 years between 75-85 US dollars per barrel...

Until today, the oil price still continues to drop....the prices fell from above $100 a barrel to below $40 now, and looked poised to break below $30 next. To most commuters who drive, it is a blessing.

According to the reports, this is due to (1) the major oil producers still reluctant to slash the production amount at current price. (2) Over-production: over the past year, the world has been producing 1.5 million barrels per day more oil than it consumes. (3) The low price is also blamed on the sluggish demand of oil from some major oil-consuming countries such as China.

Please refer to today's (Jan. 8 2016) report from Reuters at:

http://www.reuters.com/article/us-global-oil-idUSKBN0UM01520160108