Salient to Investors:

Sven Jari Stehn at Goldman Sachs said:

  • The massive supply shock in half2 2014 accounted for most of the oil price decline, joined by slowing demand in December and January.
  • Since the stock market is a good indicator of economic demand, when stocks move in tandem with oil prices, demand is the driver: when oil prices move in the opposite direction of stocks, supply is the driver.
  • The new equilibrium price of oil will be much lower than over the past decade as a result of the oversupplied global oil market.

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