Global Oil Imbalance
After consumer and commercial and industrial spending contracted, factory orders and industrial production globally plunged across many key industries such as auto, construction and housing, consumer electronics, and pharmaceuticals, to name a few. By December 2008, crude oil prices had fallen more than $100 per barrel to near $33 per barrel. In five months, crude oil lost 78 percent of its value from its record high level in July 2008.
Figure 15.1 depicts a 1 mmbpd crude oil inventory surplus by the fourth quarter (4Q) of 2008. The unprecedented plunge in crude prices was driven by expectations of a pervasive lack of crude demand among Organization for Economic Cooperation and Development (OECD) countries and considerably ...
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