Peak Oil Price Trends

Very clearly, the financial and mass media finds it is not ‘politically correct’ to explain high oil prices as due to oil simply depleting and running out.

It is still preferable to cite storms, technical problems, refinery accidents, pipeline blowouts, the weak US dollar, rebellion and wars in Nigeria, Chad and Sudan, the Iraq war, al Qaida, Vladimir Putin and the ‘anti western Kremlin’ now menacing pipeline routes in Georgia, the Kazakhs or Chavez of Venezuela applying ‘resource nationalism’ to oil reserves and production plants, and demanding higher taxes and shares of profits.
We also have the energy wasteful Chinese importing too much oil to make and throw away 3 Bn plastic bags per day, and produce and export a plethora of oil and energy-intense, but still cheap industrial goods to fill supermarket shelves in the “postindustrial” consumer societies of the OECD. The Indians and other Emerging Economies do the same. Very hot weather in summer or very cold weather in winter, climate change, and why not earthquakes (?) can also be used to lever up daily traded oil on the Nymex, ICE London and Singapore, or Dubai exchanges.

But the bottom line is simple: anything will do so long as no mention of Peak Oil is made !

It is however politically OK, and also profitable for the “finance community” when traders engineer a V-shaped blip in the generally upward price trend, to cite and forecast generally declining or shrinking crude oil and product inventories in the US, and elsewhere right across the globe as an explanation of why oil prices are generally high and set to stay that way. Whenever inventories rise, which is rare, and with the right media treatment, the trading community can have a “24-hour miracle” of falling oil and product prices. Soon after, to be sure, the price growth track returns.

Financial Sense