If there is any single price of any commodity that determines the growth or slowdown of our economy, it is the price of crude oil. Too many things don’t calculate today in regard to the dramatic fall in the world oil price. In June 2014 major oil traded at $103 a barrel. With some experience following the geopolitics of oil and oil markets, I smell a big skunk. Let me share some things that for me don’t add up.
On January 15 the US benchmark oil price, WTI (West Texas Intermediate), closed trading at $29, the lowest since 2004. True, there’s a glut of at least some 1 million barrels a day overproduction in the world and that’s been the case for over a year.
True, the lifting of Iran sanctions will bring new oil on to a glutted market, adding to the downward price pressure of the present market.