By Eugenio Lilli:
Photo: Carsten ten Brink (creative commons)
Eight percent: that is how much the price of oil fell after OPEC’s decision last Thursday to maintain its oil output unaltered. This sharp drop was only the latest development in a trend that has seen oil prices on the world market tumble by nearly 40 percent since mid-June. At one point, the international crude benchmark even traded below $70 a barrel, the lowest since May 2010.
The current situation is the result of a combination of factors. On the one hand, a slowdown in the Chinese and European economies has led to a decrease in demand for oil. On the other hand, the so-called “fracking revolution” in the United States, added to an ahead-of-target OPEC production, has generated an increase in oil supply.
Despite a clear situation of overproduction, and repeated calls for a cut, OPEC, and especially…
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