From Naked Capitalism

What a difference six months makes. When we questioned the thesis that the oil price runup earlier in the year was due solely to supply and demand, we got a fair number of hostile comments (see here and here for some of many examples). And now the view that oil will keep falling has also developed a life of its own. Options contract prices indicate that a significant minority of traders are betting on $50 a barrel oil by December.

Even though OPEC moved its scheduled meeting up nearly a month, signaling eagerness to take action to combat plummeting oil prices, some traders remain convinced that oil prices have further to fall. Given that some expect OPEC production cuts of one to two million barrels a day, when demand for oil fell peak to trough by roughly eight times that much in the 1970s oil crisis, it is quite possible that OPEC's move may be inadequate in the light of declining consumption.

A perennial problem is diverging interests among OPEC members. iran and Venezuela need high oil prices to make their sulfurous, heavy crude economically viable and are calling for cuts deep enough to keep oil prices above $80 a barrel; Saudi Arabia, which has far and away the most clout by virtue of the size of its reserves, also has far and away the lowest production costs and thus is less affected than other producers by price declines.