I've been following the implosion of the commodity bubble closely. It is not looking good for 2016. Note that demand for oil is expected to drop SUBSTANTIALLY from 1.8 million barrels a day in global oil demand to 1.2 million.
The drop in oil prices is not simply a function of oversupply. Demand and utilization are dropping!
Georgi Kantchev and Margarita Papchenkova, “Outlook for Oil Use Dims Amid Supply Glut,” The Wall Street Journal, October 22, 2015, C4."The International Energy Agency, an energy watchdog, forecasts global oil demand growth falling from 1.8 million barrels a day this year to 1.2 million next year. The Organizational of Petroleum Exporting Countries, the 12-nation cartel, expects demand growth to fall to 1.25 million barrels a day, and some analysts see demand dropping even lower.…The US Energy Information Administration pegs demand growth in 2016 at 1.41 million barrels a day, up from 1.31 million barrels this year”
The world is experiencing contraction of globalization as hostilities increase between the state capitalists on the one side (Russia, China, Brazil, Iran, etc.) and the western corporate capitalists on the other side (BP, Centrus, GE, Barclays, State Street). More hostilities mean less trade. Less trade means less oil consumed in transportation.
China's bubble is deflating as well, causing a significant slowdown in global demand for all types of commodities.
It reminds me of Mercantile Capitalism on the eve of World War I.
Oil was the Great Prize of the Twentieth Century.
Clean, fresh water is expected to be the Great Prize of the Twenty-First Century.