Oil price tumbles to 14-months low on Thursday, is it the end of oil price hike? Or is it an answer to those who never agree with peak oil era? Will the oil price continue to go down?

The oil market has no doubt became a victim of various global happening, different circumstances forced the fuel price to drop to its lowest level in 14-months and this may continue for some times.

Oil as one of the world most demanding commodity is susceptible to surge or sag in price depending on market stability.

Currently the world is in a real financial mess. Stocks are crushing, industrial production has been on declining, millions are losing their jobs, companies are closing, investors are everyday becoming scared and this has seriously affect manufacturing globally which are 100% oil intensive.

This Turmoil in the global financial markets hurt sentiment and reinforced concerns about weaker oil demand growth. Because demand for oil is derived from wishes to use oil to obtain desired services. It is not derived from preferences for the commodity itself.

The US Department of Energy said on Wednesday that US crude oil inventories had risen by 8.1 million barrels in the week that ended October 3, far more than market expectations of a 2.3-million-barrel gain. The Department of Energy further lowered its forecasts for 2009 global crude oil demand and the International Energy Agency cut its estimate for demand growth this year by 100,000 barrels per day (bpd) and for 2009 by 140,000 bpd.

Record shows that in September alone 156,000.00 jobs was lost and this is no more than 22% of job lost globally same months. Hence people demand for oil services must fall sharply.

The energy crises and rise in oil price necessitate for global concern for an alternative. Developed countries intensify effort to manufacture highly oil efficient vehicles, more investment is being made on renewable energy which is now over $100billion, especially within US, Europe and some part of Asia. This measure is significantly reducing oil demand.

In general, reduce in oil demand by reducing use of oil services and motivating selection of higher conversion efficiency equipment, hence lower the oil price. For example, gasoline prices influence demand through vehicle miles and fuel efficiency of vehicles. Vehicle miles is influenced by cost per mile of driving, including per mile gasoline costs, equal to the ratio Pg/Mpg (where Pg is the gasoline price), and other costs. Increased gasoline prices lead consumers to purchase more fuel efficient cars. Both factors imply that increased gasoline prices reduce gasoline demand, with the vehicle miles adjusting relatively quickly and vehicular fuel efficiency adjusting slowly as vehicles enter the fleet.

Except for firms selling energy resources (oil) or energy commodities, the same issues are important for industrial and commercial use of oil.

Market participants are still very much concerned that demand will continue to dwindle as global economies continue to slow sharply,"

Another reason for upward pressure was a stability and slight gain in the dollar against all major currencies in the last two weeks, though a little weaker this week, caused by anxiety about the cost of the US government's $700bn bailout of struggling banks. A weak dollar usually means higher oil price.

With volatility at historic levels, investors have been fleeing to traditionally safe havens. Many investors turn to commodities as a hedge. And this has begun to reflect as the price of gold rose by 5%. Will this u-turn of investors continue to impact negatively on the oil market? Will there be any possibility of halting continues slump in oil price by OPEC?  The organization is schedule to meet this November, to look into an option of lowering the supply, in order to stabilize the oil price.

But for sure with this financial turmoil hanging on the neck of global economy and the fear of global recession, oil market will remain unstable in the next few weeks. And the oil peak era is not a myth or legend and is not history but a reality. After financial crises subside, there will surely be sharp rise in oil demand and hence inevitable rise in oil price.