I don't know anything about the business of oil, so I don't understand how the prices drops so much in such a short span. What causes it, anyway? In the laymenest of terms possible, please. I've never understood oil prices.
The biggest factor is production vs consumption, which is just supply and demand on a massive scale. The world at large consumes (I think, I might be misremembering last sunday's Money Talk where they talked about this) about 93.5 million barrels of oil per day. Right now, the world's oil producers are producing roughly 94.5 million barrels of oil per day. That doesn't sound like a big difference, but when you consider that it means the world is producing a million barrels of oil (159 million liters) per day more than it is consuming, that stacks up fast. As supply builds up, prices go down. As producers (such as OPEC) decide to strategically reduce production, that supply dwindles, and the price of oil goes up.
One of the big impetuses behind the increase in oil production has been the US's new useage of hydraulic fracturing (aka "fracking") and horizontal drilling, which has opened up new sources of oil that weren't previously producing. We're now producing petroleum (and natural gas) at a level not seen since the 70s - almost double what we were around 2007ish. Fracking is only really profitable because the price of oil had been so high - it's a lot more costly a method to get the oil than conventional drilling and pumping. Saudi Arabia has also increased production, and OPEC has decided not to decrease production, so the price of oil has fallen drastically as supplies increase - especially since the US is the biggest consumer of oil at 18.5 million barrels per day (even china only consumes about 10 mil/day). If we're producing more of our own oil, we're buying less (but still buying lots) from abroad. Demand eases, supplies increase, prices go down.... and while OPEC's profits also go down, they are eyeing the long term.
Russia's economy has been faltering for a long time. It has never been great since the soviet collapse to begin with, but it's been hampered further recently by sanctions imposed for its shenanigans (such as the clandestine de facto invasion of Ukraine). The major mover and shaker in the Russian economy is their big oil company, Gazprom. Falling oil prices hurt Gazprom, which hurts the Russian economy. It also makes the US's oil producers who use fracking not able to turn a profit. I forget the exact figure, but I think the price of oil has to be something like $80 or $90 per barrel for fracking to show a profit - and lately it's been fluttering around in the mid 50s, with Saudi Arabia saying they want to push it as low as $40. Their hope is they can starve their competition out of business, weather the storm in the short term on their savings, and then things will go back to the "good old days" where they sat in the catbird seat.
