All about Oil: an overview

Sunday, October 03, 2004 | 02:45 AM


Max Sawicky observes
“The most important story that nobody is talking about is fifty-dollar-a-barrel oil. The potential harm to the U.S. and world economy is huge.”

Well, we here at the Big Picture have been pounding the table on Oil over the past 13 months . . .

Most recently, we observed Oil = $50 a Barrel, including a chart demonstrating why there is no “terror” premium. (these comments were picked up by The Wall Street Journal and Barrons.

Early on, we recognized that it was Chinese Oil Demand underlying the increase in cost. We also looked at Oil Demand versus Refining Capacity. We have examined Global Crude Oil Demand & Gasoline, we looked at Oil: Inflation adjusted.

We asked a lot of rhetorical questions about Oil: Why is it that Gasoline Prices seem to rise so quickly, but fall so slowly? here -- Gasoline versus Crude Oil prices.

We wondered: Do Higher Oil Prices Lead to Recessions? Turns out the answer is yes.

We looked at whether Oil Jitters Gotten Overblown? That answer was no. We also observed that Large Hedge Funds have been ignoring our good advice -- at their own loss.


Lastly, we addressed the false idea that Oil price rises are like a tax increase . Our sentiments were echoed by Caroline Baum of Bloomberg .

Sunday, October 03, 2004 | 02:45 AM | Permalink | Comments (2) | TrackBack (6)
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Listed below are links to weblogs that reference All about Oil: an overview:

» Texas Tea from PoliBlog
Barry Ritholtz of The Big Picture analyzes the current situation regarding oil demand--some very interesting stuff, including the rather important point that the main price pressure on oil prices is not problems in the Middle East, but rather massive d... [Read More]

Tracked on Oct 3, 2004 11:37:18 AM

» All about Oil: an overview from Tech Policy
I have been reading the Big Picture for the past couple of weeks, and I recommend it. Here is a roundup of Oil related stories discussed on the Big Picture: All about Oil: an overview [Read More]

Tracked on Oct 3, 2004 1:25:50 PM

» Price of Gasoline - Bush's Fault? from bLogicus
One of the criticisms that has been leveled at Bush is that the price of gasoline has risen under his watch. In general, I don't think any president is able to manipulate the global economy the way his detractors (and... [Read More]

Tracked on Oct 4, 2004 1:15:08 AM

» What about China? from The Glittering Eye
In last Thursday's first presidential debate of the 2004 campaign season, there were a number of glaring omissions. Iraq was discussed, of course. And the only real substance of the debate was in the discussion of North Korea. The minimal... [Read More]

Tracked on Oct 4, 2004 1:35:50 PM

» What about China? from The Glittering Eye
In last Thursday's first presidential debate of the 2004 campaign season, there were a number of glaring omissions. Iraq was discussed, of course. And the only real substance of the debate was in the discussion of North Korea. The minimal... [Read More]

Tracked on Oct 4, 2004 7:33:18 PM

» Demand Driven Oil Squeeze from Different Opinion
I have ... quite naturally very little to add. Except of course that the futures and swaps market for crude still points to only a slow decrease in prices, and the chart below that underlines what Barry says about the oil price increase being driven pr... [Read More]

Tracked on Oct 11, 2004 5:23:19 PM

Comments

It's a combination of things. Prodcution, capcity, consumption are the biggest long-term factors for sure -- but there's also, I contend, an "instability premium." To what degree at any time one or another factor is responsible for oil pricing, that's a tougher guess. But it does seem ludicrous not to acknowledge that when momentary spikes of fear (over regional stability) are included in the calculations, there is indeed some correlation.

In the immediate aftermath of the 9-11 who was brave enough to link a major oil exporting country with terrorism? Not many. Price remained normal. When it seemed war on Iraq was all but inevitable, who really believed that there would be anything but a decisive victory for the U.S.? Not enough. Price remained normal.

Iraqi handover? Hm, mebbe things settling down...price go down.
New round of attacks? Price go up.

And, boy, if we're running out of oil, like all the hip peak oil theorists say, mebbe the oil mongers are getting a premium now, while they still can (before the Toyota Prius' of the world help drop demand significantly in another 20 yrs).

Posted by: memer | Oct 3, 2004 6:39:27 AM

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