The US is producing record amounts of oil, and there’s plenty of supply out of OPEC and Russia. But there’s not enough demand from developing economies – think China and India – to consume all the oil that’s being supplied. A global recession has left Asian demand weaker than expected, and governments are slashing fuel subsidies across Asia. That drives up the cost of gasoline, diesel, and other everyday fuels, further dampening demand in a region that will largely determine the future of global oil markets.
It’s not just Asia, though. Austerity measures and decreased consumption across Europe are curbing oil demand throughout that continent, too.
