The collapse in the price of oil is unmaking deflationary pressures and could cause a wave of defaults as the global economy and cause an environment where people are going to be less willing to lend money not just in the energy sector but across the economic spectrum. Not only are there growing supply side worries it is coupled with signs of weakening demand.
As OPEC is getting ready to meet next week in what will be their most important meeting in recent memory, it seems that global central bank actions may be doing some of the heavy lifting to support global oil demand expectations.
The Federal Reserve seems to want to ignore the potential global fall-out as they start on a path of raising interest rates while the rest of the globe seems to be slipping back into the economic abyss.
Just after North Dakota celebrated its billionth barrel of oil out of the Bakken oil formation the U.S. Energy Information Administration (EIA) reported a record amount of oil in storage. Stockpiles rose 1.7 million barrels putting commercial crude inventories to 399.4 million barrels.