Why is the price of oil down?
I know production is up in the US on sweet crude. However, has Saudi Arabia increased production to hurt the Iranians and Russians?
Any input would be appreciated.
FYI, at one point I owned The Russia Fund. As you pointed out it was like owning an oil derivative. It would go up and down based on the world oil price. It was a good hedge against high oil prices.
I don't know if I'm right or not, there are many people on this forum better qualified to answer the question, but here goes....
The biggie of course is the huge increase in American shale oil extraction, but consumption also has not increased due to the world economic contraction. The US, China, Europe and Japan are all using less oil for various reasons. The US dollar has also strengthened, meaning it takes less of them to purchase a barrel of oil. This may be the main reason, but could change in the blink of an eye. I'm hoping someone will correct me if I'm wrong.