[quote=utcsox]The supply curve and demand curves for crude oil in short term is very steep. With oil price above $100 per barrel , fracking and oil sand is economically viable to produce crude oil. The softening global economics (China and Europe) has reduced the demand for crude oil globally. Both of these factors have contributed in a sudden sharp fall in crude oil prices in short term. Now, we will see how demand and supply adjust to price changes in long term.[/quote]
I don’t think there’s actually been any significant decline in oil consumption or demand. This drop in price has been almost entirely supply driven. The US, along with a few other countries, have upped production. Nobody has cut production, hence too much oil and no place to put it.
