The Geopolitical situation in the oil markets are perfectly set up for oversupply, and weak demand is ensuring this oversupply goes nowhere. There is still no bottom forming in the oil markets yet so the troubles look set to remain.
Much of the problems in the oil markets can be pinned on a power struggle going on between OPEC and the US. OPEC, the Organisation of Petroleum Exporting Countries, is a cartel of twelve counties that has controlled the oil markets for decades. Its market share has been undermined by the growth in US oil production, to the point that some are now calling it dead. Certainly, it does not have the market share it once did, currently at 40% and expected to fall to 31% in 2015.
Venezuela, which owns the world's largest reserves, is seeking cooperation between OPEC members to calm prices. This could see a cut in supply to prop prices up. So far, OPEC leaders have been unable to agree on a change in supply.
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