As Mr. Officer writes, “The financial crisis was the spark, de-leveraging the fuel.”  As the mortgage crisis rose to a panic, the U.S. dollar that had long been in a slump of its own began to make a comeback.  With the stronger dollar, the price of oil purchased in U.S. dollars had to come down.

Further complicating things, as the financial markets tumbled and talk of a bailout began to take shape, speculators holding long positions in oil were forced to close out those positions to cover mounting losses. 

Altogether it was a perfect storm.  Unfortunately, I don’t think the eye has passed us by.