Why Oil Prices Went Down So Far So Fast

[Purveyor]

By Isaac Arnsdorf Oct 30, 2014 7:14 AM ET

The reasons oil prices started sliding in June were hiding in plain sight: growth in U.S. production, sputtering demand from Europe and China, Mideast violence that threatened to disrupt supplies and never did.

After three-and-a-half months of slow decline, the tipping point for a steeper drop came on Oct. 1, said Ray Carbone, president of broker Paramount Options Inc. That’s when Saudi Arabia cut prices for its biggest customers. The move signaled that the world’s largest exporter would rather defend its market share than prop up prices.

“That, for me, was the giveaway,” Carbone said in an Oct. 28 phone interview from his New York office. “Once it started going, it was relentless.”

The 29 percent drop since June of the international price caught traders and forecasters by surprise. After a steady buildup of supply and weakening demand, the outbreak of an OPEC price war is casting doubt on investments in new oil resources while helping the global economy, keeping inflation in check and giving motorists a break at the pump.

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http://www.bloomberg.com/news/2014-10-29/why-oil-prices-went-down-so-far-so-fast.html

[Wellstone ruled]

1. Look for further drops

as US production increases,our SPRO has to be reduced to a ratio of 29% production. Lots of the 147/bbl will be going on the market at spot. Only thing that could change this is if the Rethugs take the Senate. Then all bets are off and we get the shaft price wise. Rethug=Oil Money=Screw the populace. 4/1/2015 oil at 125+/bbl ? That's why this election means so dam much. Bait and switch.

[belzabubba333]

2. spro?

[Bill USA]

7. SPR: Strategic Petroleum Reserve, SPRO: Strategic Petroleum Reserve Office as I understand it to be.

[cprise]

3. Any data on how much ISIL is dumping onto the market? n/t

[quadrature]

4. not any more, than would be pumped otherwise

Ok,Ok, I suppose the amount could change somewhat,
but whoever owned the oilfield
before, would be pumping today without ISIS

[newthinking]

5. Part conditions, part manipulation. Big oil and the saudi's need to "break the back" of

the countries that are doing independent sales and using the money to benefit their people. MO

[bemildred]

6. It's about control of the market.

Should get ugly. Hard to predict the consequences, good for some things, bad for others.