The Peak Oil Crisis: Stifling a Rebound

Since the beginning of the economic troubles some 18 months ago, the question on nearly everyone’s mind was; “When will the recovery begin?”

A lot of water has gone over the dam in the last 18 months. An official recession has been declared, millions have lost their jobs, much of Detroit has gone bankrupt and the government has spent trillions on bailouts and stimuli. Three months ago the collective wisdom of investors concluded that the recession was nearly over. This resulted in one of the faster rebounds the stock markets have ever known — based on the flimsiest of evidence and much wishful thinking.

In the last six months the demand for oil has fallen and stockpiles grew while, oddly enough, prices rose. Part of this increase was caused by speculators hedging against the falling dollar, and part was caused by still more wishful thinking that the demand for oil would soon recover.

A year ago prices rose to the previously unimaginable high of almost $150 a barrel. Oil producers made one last effort to keep up with demand and in doing so may have pushed world oil production to an all time high – the “peak” in peak oil. While it took six years for oil prices to climb, it only took six months for them to plunge into the $30’s causing panic amongst the exporters of OPEC.

Falls Church News-Press