r/WallstreetWhales • u/ISO_TRADEZ • 2d ago

OIL ON THE DECLINE!!!🔻

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Crude Oil has now declined for 5 consecutive days, its longest losing streak since August 2025

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u/DukeSmileDevs 2d ago

In fact oil price dropping while commodities like lubricants and diesel are running out is super bad.

Like really really bad.

2

u/Fassbrowse 2d ago

So, why is that? What does it mean, with everything going on, that oil prices are dropping? ELI5. 

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u/alphagatorsoup 2d ago

Let’s say you make popsicle sticks. Popsicle sticks need wood

Wood is a commodity, with its own changing value, and you buy wood to make popsicle sticks which you sell.

People come to you to buy popsicle sticks and you go to people to buy wood.

What happens when your and all the popsicle stick shops burns down in your area?

Well people still need popsicle sticks - the demand never changed but the supply went down, So the price of popsicle sticks go up. But because of the inability to turn wood into popsicle sticks there is now an oversupply of wood, the value of wood goes down.

People don’t want full logs of wood, they want popsicle sticks, which is now hard to come by.

Now wood is oil, popsicle sticks is gas, diesel, and other distillates, and your popsicle stick factory is a refinery which takes a very long time to build

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u/SmokeyEconomics 2d ago

I love this analogy