The crude oil Brent price has been falling from one psychological low to another: since June´s $115/barrel it decreased to $100/barrel on September 10, $90/barrel on October 9 and $85/barrel less than a week later. It hit another low of $75.05/barrel for Brent crude after an OPEC meeting on 27 November resulted in no production cuts, despite expectations of the contrary from countries such as Russia and Venezuela.

The explanation for the decrease is fairly simple: there is a clear imbalance between supply and demand, in favor of the former. Several factors are responsible.
Global demand for oil went down on account of the global economic slowdown, with many producers in places like China, Japan, Brazil, India and Europe closing down operations in the past years. Long-term energy efficiency measures in the consuming countries add to this trend. On the other hand, production of oil shot up both in North America and in some Middle Eastern and African countries such as Iraq, Nigeria or Libya…


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