Oil price is crashing - what does this mean...? 🤔

Just one look at that chart and you can see a fairly rapid drop off in the price of oil over recent weeks.

This is despite OPEC announcing a cut in production (cut of over 1bn barrels per day!) to help prop up the price just a few weeks ago.

You would expect that the price should be rising - especially given geo-political tensions...

But this isn't the case. So something else is going on...

(Hint: oil producers don't tend to club together to cut oil production when the markets are rallying...)

So what does this drop in oil price tell us?

It's not normally good news. It's typically a good indicator of an impending slow down in the economy as it indicates that the demand for energy (=oil) that is used for production is low.

But for the price to fall this far in the face of otherwise bullish market signals (ie lack of supply) is quite frightening. We could be in for one heck of a depression!