Calculated Risk:

THURSDAY, NOVEMBER 27, 2014
WTI Crude Oil Falls Below $70
by Bill McBride on 11/27/2014 12:48:00 PM

From the WSJ: OPEC Leaves Production Target Unchanged

The Organization of the Petroleum Exporting Countries said its 12 members, who collectively pump around one-third of the world’s oil, would comply with its current production ceiling of 30 million barrels a day. That would involve a supply cut of around 300,000 barrels a day based on the cartel’s output in October, according to the group’s own data.
...
The oil producer group’s decision led to a further sharp selloff in major global oil benchmarks, with U.S. markets closed for the Thanksgiving holiday. Brent crude fell about 6% to below $73, a four-year low, while the West Texas Intermediate benchmark was down 3.2% to $71.36 a barrel.

This graph shows WTI and Brent spot oil prices from the EIA. (Prices today added).

According to Bloomberg, WTI has fallen over 4% today to $69.40 per barrel, and Brent to $72.97.

Prices are off over 35% from the peak for the year, and if this price decline holds, there should be further declines in gasoline prices over the next couple of weeks. Gasoline futures are down about 10 cents per gallon.

[...]

As Gail the Actuary said, many OPEC producers cannot long tolerate prices below about $80 a barrel. Recall that oil money is a major source of government funding for many, many oil exporters with (rightfully) restive populations. Something like 25% of Saudi Arabia is Shia and there is a history of conflict with the rulers. And while one would think that cheaper oil will help the world economy, she points out that the prices are still historically-high, so consumers will not find much of a windfall while many producers will suffer a great deal. Unrest in OPEC countries and other oil exporters is a real possibility in coming months.

Another possible near-term advantage for us is that it makes the Athabasca tar sands even less economically attractive, but remember that the investors and banksters want to be paid even if it means that the operators lose money on each ton they mine... Longer term, the push to burn the stuff will march on because traditional fields continue to deplete...

Putin must be crying. The Ruble continues to weaken...

Enjoy the cheaper fuel this winter, but don't start "rolling coal" to celebrate!!1 ;-)

Cheers,
Scott.