I think, however, the Saudi solidarity with US on oil price manipulation is the main reason for that. It is aimed at destabilizing several strong opponents of US globalist policies (including Iran, Syria and Russia).

I think, however, the Saudi solidarity with US on oil price manipulation is the main reason for that. It is aimed at destabilizing several strong opponents of US globalist policies (including Iran, Syria and Russia).

I think it is only politics and nothing else.

I think that it is a political reasons

Decline in demand was the key driver for the 2008 crash, the sharp drop in prices this time around is being caused by a supply glut. Continued growth in U.S. shale production and increase in non-OPEC countries oil exports have led to excess capacity. The impact of this increased U.S. oil production is quite immense, that unlike in the past, geopolitical tensions have been unable to push oil prices higher. What’s making the supply glut even worse? Slowing demand. The International Energy Administration lowered its crude oil demand projections for 2014 to about 200,000 barrels per day from the current 700,000 barrels per day. The IEA forecast is the lowest since 2009. Furthermore, there’s the stronger U.S. dollar. 

Some reasons for the drop in price:  conflicting variables that affect oil prices, from supply and demand, geopolitics (which is inherently unpredictable), and the global monetary environment, but the several factors that have a high probability of pushing crude oil prices lower in the next couple of years.

http://www.forbes.com/sites/jessecolombo/2014/06/09/9-reasons-why-oil-prices-may-be-headed-for-a-bust/

Because they want to struggle the shale oil producers of USA, a relative important alternative of the traditional crude oil: They want to find the ?$/barrel that will put those producers out of the market.

The drop or the rise of crude oil prices is not due to scientific reasons. It is a political-economical game in which there are gains upon the drop & there are also gains upon the rise. An intricate game that is well-played at a time in which there are no serious challengers to the road map that has been set after WW2 & until now. 

The drop is mainly caused by:

- An excess of supply in a weak period which in turn, created some imbalances in the global oil market

-  Weak global growth lead to the revision of growth rates (negative trend) by major international organizations (IMF, WB, ECB and OECD)

An appreciation of the dollar against other currencies. In fact, a stronger dollar and shift away from risk assets has accentuated the fall in prices.

- The third reason is definitely a political reason.

Dear Helmi

I absolutly agree with you.

U.S. Oil Prices Fall Sharply as Glut Forms on Gulf Coast is an article that covers the issue! Politics, of course. How about this quote :"So much high-quality U.S. oil is flowing into the area that the price of crude there has dropped sharply in the past few weeks and is no longer in sync with global prices.In fact, some experts believe a U.S. oil glut is coming. "We are moving toward a significant amount of domestic oversupply of light crude," says Ed Morse, head of commodities research at Citigroup."!!!

"The price has fallen sharply since the summer and is 30% below its June price.The drop comes as traders believe members of the Opec oil exporting countries, which control about 40% of world oil exports. will not cut production.Opec's 12 member countries will meet later this month to discuss the global oil market."

http://online.wsj.com/articles/SB10001424052702303722104579239831640276094

http://www.bbc.com/news/business-30033258

It is due to overproduction of crude oil from the middle east and uncertainty factor amongst  12 OPEC 

Dear Mounir

Please have a look at the following article titled: Why is Saudi Arabia using oil as a weapon?

http://www.bbc.com/news/world-middle-east-30289546

Best Regards

Helmi

Dear Helmi,

Many thanks.

From my very elementary knowledge  of economics and international trade, I think this is down to increased supply in the market resulting from new sources of crude as well as increased use of non-fossil fuels especially in the developed world.

I think that, as all staff of economics, when a process starts it is difficult to put an end, due to the so complicated and arbitrageurs way of our interconnecting financial building.

I agree with the three reasons mentioned by Dr.Helmi, and would like to thank him for the article which offers answers to many questions raised on the subject

According to the "Economist Explains", there are four reasons  for the drop in oil price which I totally agree with as an economist.

1. Low demand resulting from weak economic activity, increased efficiency, and a growing switch away from oil to other fuels.

2.  America who was before among the largest importer of crude oil 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. according to the VOX, the US alone has added 4 million extra barrels of crude oil per day to the global market since 2008 which is significant compared to Global crude production of 75 million barrels per day.

3. The Supply of crude oil by the oil exporter including the OPEC members has not responded to the low demand, creating increasing excess supply by the day which by elementary Demand-supply theory will drag down the price the more.

4. As a confirmation of the the third point above, the Saudis and their Gulf allies have decided not to sacrifice their own market share to restore the price.

In addition to these four points, a stronger USD also contributes  to the decrease in the oil price.

The summary therefore is that the World is producing more crude oil than it is consuming, leading to excess supply and the consequence low price.  ECONOMICS IS REAL!!! 

An economist will always tell you it is supply and demand that determines the price of oil or anything else.