We all see that the price has fallen. Whether this is in the range of normal fluctuation or the start of an extended decline remains to be seen. I certainly wouldn't assume either, there are many variables involved and many of them are not amenable to reliable prediction.
Increased US production is certainly a factor. Whether it is sufficient in the medium to long term to compensate for decreasing production and potential political events elsewhere remains to be seen. Again, the price drop is in no way specific to "sour crude", it's across the board, and the oil displaced by US production is by no means all sour: the single biggest drop in US imports is the 73% decline in shipments of light, sweet Nigerian crude. What the Russians are exporting is only mildly on the sour side and is not especially heavy and would require no major modifications to refine: unlike Venezuelan, it poses no special technical challenges to transport or refine.
The Saudi production cuts are established and on record, that's not under dispute. I would not expect OPEC as a whole to address the issue before their scheduled Nov meeting unless the price drops under $90.
The "ever lowering prices" expectation is not shared by most credible analysts, though it may fly around Twitter.
If you cherrypick the panic comments (social media and cherrypicking go together rather well, that's the impression you get. The price will have to stay under $100 for some time to drop the annual average to a seriously critical level. That may or may not happen: again, there will be a substantial acceleration in buying in Oct and Nov as the NE Asian consumers get their winter contracts in. Certainly a sustained period below $100 would put a lot of stress on the Russian economy, but I don't see credible analysts expecting that, so it remains largely a speculative possibility.
"Open source" encompasses a fairly wide range, no? If you believe what you read on Twitter, you'll never want for moonshine.
Again, though, what you're not addressing is the point that there's little reason why any of these oil issues would cause Putin to revise his policy in the Ukraine. If anything, these problems may make Russia even more aggressive. The decision to back down or push ahead in the Ukraine will have no impact on the oil price problem, which will be there no matter what happens in the Ukraine. A transient drop in oil prices will cause pain, but it will be manageable pain. An extended drop... who knows where that would go, but it's far from certain to happen.
Bookmarks