... On the one hand, it seems clear that the recent downward forces on prices will continue: negotiations with Iran will drag on as the US administration is determined to postpone any attack till after the election ....  Spain's difficulties rescuing Bankia .... the tension between the Greek populace and international authorities ... Spanish and Greek unemployment continue to soar ... the continued inability of the polarized US political system to come to grips with major challenges - particularly the upcoming expiry of the Bush tax cuts and the automatic spending cuts that will be triggered around the end of this year.  ... These kinds of considerations suggest that the downward break in oil prices could continue quite a lot further.

On the other hand, with Brent falling below $100, we are now testing the current level of OPEC's tolerance for lower prices.  In 2009/2010 they were willing to settle for $70ish without reducing production.  However, since that time they - particularly Saudi Arabia - have signed up for extensive domestic stimulus programs to appease the population following the Arab Spring.  Thus they almost certainly need somewhat higher prices now. Mr Al-Naimi has been quoted on numerous occasions in the last year saying that $100 was a fair price for oil.  Will they cut oil production now, on that rule?  Or wait till it crosses $90 or $80?  I'd be surprised if it took $80 to get them to act.

Thus I would expect that if the downward movement were to continue, it would not be too much longer before it would trigger a Saudi production cut.

[It's one thing for prices to increase due to economic growth, quite another for them to be increased despite economic doldrums.]