Post
Topic
Board Economics
Re: The reason that crude oil price crashed
by
exoton
on 12/12/2014, 00:40:33 UTC
The reason oil prices have come down is because OPEC has cut prices arbitrarily. They were artificially high to begin with. On average it costs an OPEC nation ~$30 to produce a barrel of crude. They're still making a shitload of profit.
OPEC does not set the price of Oil, the market does via supply and demand. The price has gone down due to lack of demand while supply has increased (due to previously high prices).

The price of oil has nothing to do with Russia as, again the market sets the price (although Russia is suffering from lower prices).

It is possible to speculate that QE caused oil prices to be artificially high, however I would doubt this happened because it is expensive to store oil and there is only a small amount of oil actually stored at any time.