One word from Saudi Arabia and the price of oil comes down fast even as Iran and Venezuela stumble. (See Graph from Noon Tuesday)
- Iran is on the cusp of punishing sanctions
- Venezuela – which sits on the world’s largest oil reserves – may not like how I paraphrase Margaret Thatcher’s great quote “The problem with socialism is eventually you run out of oil money.” But that is what is happening. Declining output (down by more than 20% year over year ), China wanting to be paid $50 billion (probably in oil), and legal judgments that granted ConocoPhillips their Caribbean refinery and mixing terminal, mean that the national oil company will have trouble exporting its heavy crude for needed cash
Don't expect to see this significant decline at the diesel pump. It will take a long time for this to roll into better prices. Recall the phase – “up like a rocket – float down like a feather”.