Moreover, the Federal Reserve's decision to raise its key Fed Fund Rate by 0.25 percent at its December policy meeting implies that the US dollar will appreciate. As oil is traded in US dollars this should add downward pressure on oil prices.

Furthermore, oil prices have a domino effect on prices of several other (energy) commodities. When the oil price slides, prices of coal and natural gas decline accordingly. So far this year prices of West Texas Intermediate crude and Brent have fallen around 40 percent and 45 percent, respectively. Meanwhile, prices of natural gas and coal have plunged around 50 percent and 15 percent, respectively, over the same period.

Jakarta-based SoeGee Futures says the break-even point for oil is estimated at roughly USD $85 per barrel, implying that oil producers make significant losses when prices head toward the level of USD $30 per barrel. In the third quarter of 2015, big oil companies - including Royal Dutch Shell Plc, ConocoPhillips and Eni SpA - posted losses. Last week, Chevron and ConocoPhillips announced that they will cut spending by 25 percent next year due to unconducive global conditions.

SoeGee Futures said low crude oil prices are a threat to the world economy as almost all countries now have oil refineries. However, provided oil prices can be supported by geopolitical conflicts in the Middle East and stimulus programs in China and the European Union, oil prices may rise to the range of USD $60 to $70 per barrel in 2016.

Crude Oil Price:

After crude oil, the most important energy commodity in the world's energy mix is coal (followed by natural gas). Coal - as energy source - accounts for 30 percent of the world's energy mix and 40 percent of electricity generation. However, in recent years the role of coal toward the world's energy mix has been in decline due to the rise of shale gas (natural gas trapped within shale formations). The price of gas has plunged due to ample reserves, ample supplies and an expected mild winter. Apart from these factors, coal has also become less popular due to its environment-unfriendly nature (compared to gas which is a relatively clean energy source).

Around 80 percent of the world's coal production is currently sold for a price that is below production costs, implying that coal miners are making losses with each amount of coal they sell. As it is difficult to boost coal demand on the short-term, the key to improve the coal price is to curb coal output (if miners will not adjust output by temporarily terminating some mining operations, then bankruptcies will eventually cause declining output and cause a price recovery).

Indonesia’s November benchmark thermal coal price fell 5.2 percent (m/m) to USD $54.43 per metric ton (FOB) from USD $57,39 per metric ton in the preceding month, touching an all-time record low. So far this year, the reference price has fallen 15 percent.