Remember when President Obama said in 2012, “We can’t just drill our way to lower gas prices”? The Smartest President Ever was as wrong as he was on Obamacare saving the average family $2500 a year. Oil prices have just skidded below $57 a barrel for benchmark Brent crude, down 45% since June. Agraph from the UK Telegraph tells the story.

Unlike previous falls in oil prices, this price decline is due to rising production, not falling demand. Amrita Sen writes in the Financial Times:

…this time it is different and not just because of the relative scale of price moves. The 2014 sell-off originated in the oil market: first from rising inventories as demand weakened and unplanned outages eased; and then when Opec — effectively Saudi Arabia — decided not to intervene and let market forces rule.

One of the reasons Saudi Arabia relinquished its role as a swing producer is precisely because of these differences — in 2008, external factors caused the drop in demand, which Opec then took action to correct. This time around, the problems came from within.

Production cuts by Saudi Arabia to shore up prices would therefore only result in the kingdom losing market share given the inability and unwillingness (for various reasons such as lack of revenues or high social spending) of other Opec and non-Opec countries to reduce output.

We have got OPEC over a barrel, so to speak.  Remember when Sarah Palin was mocked for her slogan, "Drill baby, drill!"?

98.9 The Answer has created a graphic that well sums up how ignorant and wrong our presient was opning about supply and demand in the single largest commodity traded in the world: (hat tip: Clarice Feldman)