Why is the price of oil dropping?

I’ve been watching the price of oil lately (what, don’t you do that also?). I just read this on Bloomberg this morning, which implies further declines in the price of crude through 2015. The question is why. Typically we only see this sort of sustained decline in the face of an economic downturn. There’s a lot of subtext that I’m missing here though, and I’m hoping some of my readers can fill in the gaps for me.

Here’s the facts as I currently read them:

  • Aside from US shale, there still isn’t much slack in the supply. Major Middle Eastern producers don’t have much ability to increase production. Russia is facing sanctions that will harm its ability to develop new production over the next decade or more.
  • There’s still serious threats to supply. Think Libya, Iraq etc.
  • Iranian oil is theoretically banned, although they’re still selling to China and a few other places. Same for Kurdish oil, although some of it is clearly getting out.
  • Europe is still struggling, but everyone is claiming they’ll avoid a triple-dip recession.
  • China is supposedly recovering.
  • The US is supposedly growing at a 4% clip, although everyone knows that the consumer is still struggling.

I have five six theories right now about this:

  • This is all due to strength in the US dollar (flight to safety?).
  • Blame it all on better fuel efficiency, more people taking public transit (or telecommuting) or just blame it all on TSLA.
  • Cynical notion – the price of oil is entirely manipulated and has no basis in supply and demand. Somebody wants the price to be low in order to punish Russia and Iran.
  • Somebody is selling a lot more oil into the market then they’re telling OPEC.
  • Somebody is lying through their teeth about growth.
  • This is all just a short-term thing.

Am I missing anything here?