Oil Prices Just Had A Terrible Week

We haven’t really seen anything like that in years: oil prices fell by more than 6% in three days, here is our best explanation to this sudden drop

(original publishing date: 10/03/14)

First of all, the fact:

Going from 95$ to less than 89$ is a serious price drop, especially if we are talking about a commodity.

Now, the most common reasons that the media like to report to explain this price collapse are:

a) world growth is slowing (but it’s a long term phaenomenon with long term effects on oil prices !)

b) the US are using the so-called “shale oil” more than ever (again, another long term phaenomenon !)

So please, do not trust people who talk about a) and b) to explain to you why oil had such a bad week.

This is probably the real reason why prices are falling:

That’s it, supply is going up, demand isn’t: prices go down.