United States domestic oil production has nearly doubled over the last six years, pushing out oil imports. Saudi, Nigerian and Algerian oil is suddenly competing for Asian markets, and the producers are forced to drop prices.
Earnings are down for oil companies that have made record profits in recent years, leading them to decommission rigs and sharply cut investments in exploration and production.
On the demand side, the economies of Europe and developing countries are weakening and vehicles are becoming more energy-efficient. So demand for fuel is lagging a bit. China's recent devaluation of its currency suggests the economy of the world's biggest oil importer may be worse off than expected.
Oil producer Countries such as Saudi, Kuwait, Nigeria, Iran, Libya, Venezuela, Canada are loosing 60% of oil income. Thus reducing their expenditure. China is slowing down.
US dollars appreciated world wide by 38% which cause all US multi national companies to have difficulties in their earnings and exports.
Europe is in much difficulties as GDP is below 1% and the Quantitative easing is just beginning.
You conclude. Just a thought.
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