OPEC production is down 10% from its peak in April 2012, when the price was around $100. My guess is prices are down because of increases in non-OPEC production that finally glutted the market. At current prices, all producers have to pump more just to take in the same income. I would expect the glut to last for several years, at least. Oil prices had a great ramp from the early 70’s until the mid 80’s, peaking at ~$40 around 1979. Then they dove back down to $20 from the mid-1980’s until the late 1990’s, helping to super-charge the Clinton boom. The reason for the dive was the same as for every other commodity, over-investment in a sure thing, leading to a supply glut.
I remember reading, back over a year or so, that the large investment banks had begun taking futures positions in oil because of the high price and seemingly effortless price support in world markets. The investment banks intervention in the market helped to sustain the higher than normal price levels. I’m wondering if the falling prices indicate they have stopped being competitors in a falling commodities market, leaving the remaining bidders among those who actually convert the product.