OIL PRICES PLUMMET

According to MSNBC world oil prices today are falling because of a combination of factors: US firmness in the face of oppostion implies swifter resolution and has contributed to expectations of increased oil supplies in the nearer future; US reiteration that releases from the strategic petroleum reserve could very well happen (and that’s about two month’s worth of oil); and the fact that Saudi Arabia has contracted for a massive number of tankers to ship crude. That contracting is a credible financial commitment to increased oil supply to world markets, and Saudi Arabia is the OPEC country with the most excess capacity right now, so it’s very likely to mean increased supply. This CBS Marketwatch story tells the same story.