Price of oil DROPS 3%!

[Surlethe]

I'm afraid I don't have an article or link, but I read in yesterday's WSJ that the price of oil was down to $126/bbl from its high of -- what was it? $135/bbl? The article mentioned that the decrease was something like 3.2%. I bring this up because every time oil hits a big new high, there's a thread started here in N&P trumpeting the fact, but when it decreases, nobody seems to mention it.

The point that I'm trying to illustrate is that individual fluctuations in price are not evidence for or against peaking oil production, any more than a really hot year or a single massive hurricane is evidence for or against global warming. The phenomena account for overall trends, not for any particular instance within the trend. So oil prices trending skyward are a consequence of peak oil, but when the price breaks $140 or $200, those events in and of themselves are not necessarily indicators of peaking oil production.

So, yes, oil prices are down this week. But oil production is still peaking; any bets on when they start to rise again?

[Adrian Laguna]

Now would probably be a good time to buy, unless you expect another drop before they rise again.

[SirNitram]

Data suggests oil is going to run out, very soon.

Price goes up as capacity of infrastructure is gobbled up by demand.

Speculators grab futures now to try and cash in on peak.

Price surges up with speculation.

Bubble forms, then pops.

Capacity still near limit, so pop is minor.

[cosmicalstorm]

[Sarevok]

That is good news. Untill recently the whole peak oil phenemenon has been something I read about on the internet on leisure time. However for past few months I have seen the national power grid inactive half the time, home and office backup generators failing from constant use, people selling their cars along with the usual doom of food crisis and simmering disconent of the masses. The oil crisis, at least for me, is no longer something to read on SDN but a real worry as my third country crumbles. If a sudden drop of oil prices delays oilacalypse then it will at least buy those like me who are not prepared some more time. Me personaly would like to spend to this time to prepare for immigration to Canada...

[Surlethe]

Data suggests oil is going to run out, very soon.

Price goes up as capacity of infrastructure is gobbled up by demand.

Speculators grab futures now to try and cash in on peak.

Price surges up with speculation.

Bubble forms, then pops.

Capacity still near limit, so pop is minor.

It's worth mentioning that the article was about the Commodities Futures Trading Commission investigating the futures market for price manipulation. It mentioned that the majority opinion of economists held that supply constraints were the chief factor behind the record price rise, not price speculation.

PS- Not to nitpick or anything, but peaking production != oil running out.

[Surlethe]

That is good news. Untill recently the whole peak oil phenemenon has been something I read about on the internet on leisure time. However for past few months I have seen the national power grid inactive half the time, home and office backup generators failing from constant use, people selling their cars along with the usual doom of food crisis and simmering disconent of the masses. The oil crisis, at least for me, is no longer something to read on SDN but a real worry as my third country crumbles. If a sudden drop of oil prices delays oilacalypse then it will at least buy those like me who are not prepared some more time. Me personaly would like to spend to this time to prepare for immigration to Canada...

This oil price drop is insignificant. You'd be best to get out now, if you can; wealthy nations will be hard-hit, but the third world is literally going to tear itself apart in the oil contraction. The first world is already exercising its buying power and pricing the third world out of the market for oil, and -- mark my words -- that will only increase as the price of oil goes up. Moreover, third-world countries are more dependent on oil than first-world countries; appliances are often oil-dependent rather than electric.

[SirNitram]

It's worth mentioning that the article was about the Commodities Futures Trading Commission investigating the futures market for price manipulation. It mentioned that the majority opinion of economists held that supply constraints were the chief factor behind the record price rise, not price speculation.

Given the sheer surge in the commodities trading, the 3% being corrected now was probably speculation. All of.. 3 percent, or 9 dollars per barrel. The rest is, of course, from capacity being hit and thus demand outpacing supply.

I just suspect we'll see more of these tiny bubbles that seem to offer temporary relief to the foolish. Because people will still talk about hording for the big day until the big day comes.

PS- Not to nitpick or anything, but peaking production != oil running out.

I know, I'm just pointing out that even if there were eleventy bazillion barrels of oil found tomorrow, it doesn't mean shit for a long while because the whole system is choking on demand.

[Sea Skimmer]

The price drop may also be relegated to several recently released studies which showed that gasoline consumption is down in the US vs. the same time last year. It’s not a big drop or anything, but the mere fact that demand isn’t constantly rising anymore even in the ‘summer driving season’ is significant.