All about Oil: an overview
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
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» Texas Tea from PoliBlog
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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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