What Happened To Oil Prices?

This week, oil prices floundered as a combination of factors from across the globe fed into worries that supply was far outpacing demand.

On Monday, the commodity fell nearly 8 percent, its biggest one-day decline in over three months. The commodity's most recent stumble has prompted investors to ask what happened to the stability in the oil markets and whether or not the decline will continue.

China Worries

One of the major reasons oil prices are under pressure has been China. The nation's market has been on a downward spiral recently and many worry that the largest oil consuming nation's economy will struggle to stay afloat in the coming months.

Although Chinese officials attempted to prop up stock prices by suspending new sales and injecting funds into the market, the response did little to calm fears that the nation's crude appetite would continue to falter.

Greek Drama

The situation in Greece also contributed to oil's decline. After Greeks voted "no"to the latest bailout proposal, the nation looked headed for a swift exit from the eurozone. The uncertainty helped buoy the dollar, which in turn weighed on oil prices.

Iran Talks

Talks between world powers and Iranian officials over how to curb Tehran's nuclear activities have also been an anchor for oil prices. If the two sides are able to reach a deal, the sanctions keeping Iran's oil from he market will be lifted, bringing thousands of extra barrels of oil into the market.

Where Is It Headed?

Its clear that oil prices are on the decline, but many traders are wondering where the bottom is. For now, most analysts agree that crude appears to be on a downward trajectory.

Brokerage Excel Futures sees crude prices falling below $50 per barrel in the coming days and Capital Economics trimmed its year-end price forecast to $50 per barrel for US crude and $55 per barrel for Brent.