The drop in oil prices that ahs taken place between 2014 and today is mainly linked to an excess in output that surpasses the demand by roughly 2 million barrels a day. An oversupply which is rapidly declining given the production cuts in the Americas (United States, Canada and Latin America) and also increasingly in Asia. Between stalling US frackers and wildfires in Canada, North American output has dropped by over 1.5 million barrels a day (b/d) in the last quarter, while producers in Asia and Austrlalia cut about 250,000 b/d.
According to Guy Baber of Simmions & Co., "Unplanned oil supply disruptions have been a key element so far this year that have contributed to a tighter oil market than was otherwise expected,"adding that If the disruptions last, there will be limited spare capacity to meet demand. The historical context sees OPEC Countries, led by Saudi Arabia, not willing to curb output in order to retain market share. The drop in non-OPEC output, further allows producers like Saudi Arabia and Qata to raise prices for shipments to Asia, the world's top oil consuming region.