Thinking of this as an accordian effect. The oil price signal just a few months ago was telling producers to bring every drop they could to market. So there was a long train of oil supply rushing to the scene with a bunch of inertia.

The meltdown has in these few short months taken trillions of dollars out of the investment market. At the same time demand has fallen off. The combination of falling demand and the evaporation of the hedge fund capital has caused a new lower price signal to be sent to the producers but the train of imports from the previous signal has not stopped 'stacking up' similar to those fleets of cars and trucks clogging up ports around the world.

Meanwhile no new 'demand' (with the possible exception of Japan imports) signal is forthcomming and therefore the price continues to fall in light of supplies building. It will take some new demand signal like ,heating oil or increased driving due to lower price, to get the train moving again, or simply time as the realization sets in that current consumption is still plenty strong enough to do in ELM.

Either that or some heretofore unknown clarity on the supply outlook. I echo all those who maintain that the current low oil price is doing untold harm. An energy tax designed to smooth out volitility and reward alternatives is in order. To the contributors here at TOD many thanks for keeping us focused as to the realistic supply outlook, the need for preparation, and the other countless issues of the day.