As a financial advisor you often come across clients that want to take advantage of big market moves, and naturally enough individual investors usually hear about these market moves after they have happened. As the old saying goes when the dog on the street is telling you to buy it is usually too late to buy, all of the big money players have made their money and in reality you should be selling. Recently oil has taken over the headlines because we have seen brent crude oil fall from $107 USD to  in the space of a few months. In order to evaluate if oil is a good buy at these levels we need to understand the logic behind the recent decline in the price. To keep it short and sweet and jargon free this is why we have witnessed the decline;

• Emergence of more fuel efficient cars in both Europe and the US.
• Recent decline in Chinese imports.
• European economy on the brink of recession.
• The stronger USD made made US barrels more expensive.
• A price war launched by the middle east.

The move from the middle east to engage in a price war at a time when the price of oil is in rapid decline is interesting but when you look into the fundamentals it is in fact a strategic move. The middle east stands to gain as the lower oil prices hurt its rivals (Russia, US & Iran). When the price flirts with the $80 level it begins to make production to Canada, & Texas unprofitable. Naturally enough oil is extremely volatile in nature and when you combine geopolitical tension alongside issue of supply and demand, you end up with a commodity for the not so faint hearted.