In recent weeks oil became cheaper, seriously scaring producers of this black gold. The cost of a barrel of Brent crude fell to $ 95, which is one of the worst data since the crisis of 2008-2009.Price fluctuations have occurred before, but such a long and steady decline in prices is of great concern. It is likely that in the near future oil will continue to fall in price, but the apocalyptic scenario is still not expected.

2014 is the year of unprecedented geopolitical instability. There are conflicts in the south-east of Ukraine, a full-scale civil war in Iraq and Syria, the ongoing unrest in Libya ... The kind of chaos the world didn’t experience for a long time.
In the past, the political turbulence of such magnitude always made oil prices rise significantly. There are more than enough examples of that in history. But this time, the picture is reversed. Over the past three months, Brent crude fell more than $ 15 per barrel.
Moreover, the difference in prices between the Brent and the American WTI declined. Interesting fact: the price of Brent (the quality of these brands are comparable with each other) includes geopolitical risks. If earlier the spread reached $ 10 per barrel, now it is reduced to 5-6 dollars.

The situation already bothers the producers themselves, especially OPEC. For them a fall to $ 95 per barrel is not critical (for example, Saudi Arabia and Qatar in this situation just balance their budget). But further decline could be very bad news.
Causes of the current recession are more fundamental. Of course, the geopolitical upheavals are not particularly affected the stability of supply. In Libya, the supply is already approaching the pre-revolutionary level of one million barrels per day. The situation in Iraq is somewhat more complicated, but there ISIL militants in the occupied regions seems to organized black exports to Turkey. At the same time in Shiite south the production is carried out as usual.

There is an effect of extraction of shale oil in the United States. Since 2008, oil production in the country increased by 43 percent. Now America can meet their demand by almost 80 percent. This was accomplished almost exclusively through the shale sources.
Oil from Venezuela, Nigeria and the Arab countries, which would be delivered in the United States if it were not an increase in domestic production, is directed to other markets, and there is an excess of supply, which inevitably affects the global prices. Analysts believe that the increase in production in the United States should compensate any geo-political instability.

The main problem now, however, is not the offer but demand. First of all it relates to Europe, where the stagnation continues. Economies of Germany and Italy in the second quarter once again showed a decline. There is the same situation in Spain and France.
The second locomotive of economic growth - China - also slowed his progress. Last week, the published data, which show that the energy consumption in the country (the surest measure of economic activity in this country) in August decreased by 2.2 percent compared with the same month of the previous year. Drop is observed for the first time in the last four years.

In such a situation the demand for oil declines naturally, as warned the International Energy Agency (IEA). Oil prices go down respectively. In general, the organization expects some increase in demand next year, but the estimate made in September was reduced by 100 thousand barrels per day. At the same time the volume of supplies to the world market, according to experts, will continue to increase