David Haggith of The Great Recession Blog offers his insights on the rapid changes taking place in both oil prices and supply.  The balmy days that prevailed for oil prices in early March have gone away, replaced by a downdraft that is once again suppressing prices more and more since their peak in mid-March. The storm’s breezes can now be felt in prices that have relinquished 40% of their earlier gains, and the clouds are becoming more apparent to all.

Prices had one of their worst days of the year on Friday of last week and drifted marginally lower again on Monday of this week, stabilizing some on Tuesday. Friday’s pounding came because Saudi Arabia announced it would not participate in the oil supply freeze that it negotiated with Russia since Iran is not going to join the freeze….

 Saudi Deputy Crown Prince, Bin Salman, said Saudi Arabia was ready to face a prolonged period of low oil prices.

The winds and clouds that are bringing the perfect storm against oil prices from three fronts are all growing stronger….

image: http://www.trunews.com/wp-content/uploads/2016/02/iran-oil1-300×179.jpg

“The risk is growing that any setback will result in a rush for the exits that could again lead commodity prices to overshoot to the downside.”

This problem is NOT going away until lower prices finish the job of flushing away the weakest competitors as a way of reducing supply to match current demand.

Read the entire article on The Great Recession Blog.

David Haggith recently appeared on TRUNEWS with Rick Wiles on April 5th, 2016.