Oil investors are scratching their heads over the recent drop in oil prices.  For the week, crude oil fell from $101 per barrel to lower than $97 per barrel -- a trend that has pretty much defined the oil market through January. Right now, oil prices are at their lowest since Dec. 16, 2011.

That’s not the best news for oil investors. After all, 2012 was supposed to open with a "bang" -- but recent events are blowing up in oil investors' faces.  Those events were at least partially offset by January’s positive, if misleading, U.S. unemployment numbers.

(The official view from the U.S. Bureau of Labor Statistics is that the economy added 243,000 jobs last month, knocking the unemployment rate down to 8.3%. But the numbers don’t account for 1.4 million Americans giving up and leaving the workforce -- they’re not counted in the government figures.)

That makes a big difference in calculating the jobless numbers. The Financial Times said, “If the same number of people were seeking work today as in 2007, the jobless rate would be 11%.”

So, while oil prices have received a boost from a flawed unemployment number, the larger issues dominating the economy are working against crude oil, and have been steadily knocking prices down since the start of the year.

“(While) payroll numbers will dominate macro-driven trading,” noted Andrey Kryuchenkov, an analyst at VTB Capital in London, who sees oil prices continuing to slide in February, “global demand growth is slowing this year, while developed nations will see contracting consumption,” he told Bloomberg News on Feb. 3, 2012.

What’s driving oil prices downward? There’s no single reason, but plenty of issues that, cobbled together, have fueled a weakness in crude oil prices. Here are some of the reasons at the top of that list.

Low consumption.  U.S. gasoline consumption is off, down to 7.97 million barrels per day. That’s the lowest number in 11 years, says the U.S. Energy Department. Part of the problem is the warm U.S. winter, as demand for heating oil is down significantly, although the Organization of Petroleum Exporting Countries (OPEC) is ramping up oil shipments in anticipation of higher demand in the next three weeks.

OPEC shipped 23.5 million barrels of oil in the four weeks leading up to Feb. 18 -- 1.1% more than a similar time period in January. But January’s sluggishness has carried over into February, price-wise, and March’s presumably stronger numbers seem like a long ways away for oil investors.

Lowered expectations. The outlook for 2012 grows dimmer by the day, seemingly. The World Bank, citing the European debt crisis and lower production among oil exploration and production companies, said that oil prices will be lower in 2012 than the robust 2011 numbers.

The international financial giant stated that oil prices will fall by 5.5%. Aside from the Eurozone issue and lower production, the World Bank cited weaker demand for oil in developed countries. That could set off a chain of events that negatively impacts the economies of oil-producing nations.

Little Trouble in Big China.  The World Bank also pointed to economic woes in “one or more economically important middle-income countries” -- most likely China and possibly India -- where gross domestic product growth has slowed, and where demand for oil is already off so far in 2012. Weaker economies in countries like China could be a major, downward driver in oil prices.

China is also engaged in a pricing dispute with Iran over a new contract for light crude oil (condensate) that usually triggers high demand by Chinese consumers. But Iran and China can’t come to terms on a deal, and the impasse has caused Iran to lose 220,000 barrels of oil per day in exports.

Iran sanctions. One short-term impactor on crude oil prices is the ongoing jawboning over Eurozone sanctions against Iran and the Middle Eastern nation’s threat to shut down the Strait of Hormuz. European leaders have delayed any formal sanctions until spring, as some Eurozone countries urged caution against any move that could disrupt the fragile economy in critical bourses like Greece and Italy.

Still, the bedrock decision to enact a ban against Iran has already been agreed to in Brussels, and it apparently is only a matter of time before a sanction is in place. The ban is seen as a significant issue by oil traders, and it’s no coincidence that the six-week decline in crude oil comes in the same period as Euro leaders turn the heat up on Iran.

Downward global outlook. David Song, a currency strategist at DailyFX.com, said that the apparent bounce back in the U.S. isn’t spreading overseas. As the global economy weakens, oil prices could go even lower -- way lower.

“The major fundamental themes carried over from 2011 -- the European debt crisis, slowdown in China, and sluggish U.S. employment growth -- dampen the outlook for oil. While a rise in business activity in the United States has helped to boost economic recovery there, households have scaled back on consumption,” Song noted.

“We may see an even more pronounced slowdown in retail spending as the stickiness in inflation saps purchasing power for households. As a result, we should see crude give back the advances from the end of the previous year based on slackening demand and continually falling growth expectations.

“This would pave the way for a potential test of $80 in the next six months. Should the global landscape deteriorate even further, a marked slowdown in the global economy will threaten support around $75, which could open the door for a dip in crudes down to as low as $70,” he explained.

The decline in oil prices is having a direct effect on oil and gas stocks with major names like Exxon Mobil, Chevron, BP and PetroChina all losing ground in terms of share price during the first week of February. (Although all four stocks picked up steam the week of Feb. 6, likely as a result of January’s seemingly strong U.S. jobs number.)

But even a strong jobs outlook isn’t enough to overcome the macro-economic trends listed above, and that should keep a cap on oil prices until some of those issues turn around in favor of oil investors.