Thursday, October 29, 2009

The Peak Oil Crisis: $80 a Barrel

The Peak Oil Crisis: $80 a Barrel

Last week oil broke out of a months-long trading range and surged to $82 a barrel. For many of us who remember $140 oil from the summer of '08 this might not sound impressive until you are reminded that every time oil (adjusted for inflation) broke $80 a barrel some sort of economic recession occurred.

Posted by seanb303 @ 09:53 AM (1034 views)
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4 thoughts on “The Peak Oil Crisis: $80 a Barrel

  • Yep, I have shorted oil.

    Let’s see where it goes.

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  • mountain goat says:

    Not sure how this will affect oil prices?

    “Saudi Arabia on Wednesday decided to drop the widely used West Texas Intermediate oil contract as the benchmark for pricing its oil, dealing a serious blow to the New York Mercantile Exchange. The move by the world’s biggest oil exporter could encourage other producers to abandon the benchmark and threaten the dominance of the most heavily-traded oil futures contract. Riyadh’s decision follows the divergence of the WTI benchmark from the global oil market this year.” – FT

    One price manipulation too many?

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  • Rich Kightley says:

    Everyone knows that this is due to speculation using the wave of Quantitive Easing and cheap money pumped into the banks by Governments worldwide.
    So the banks are back to casino investments again, leaking money out to wild speculation. They deserve the dole queue now before they do any more harm to our country and our world.
    Lets hope a long steady boom in Asia will stop them (and us) loosing their (our) shirts (again).

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  • mountain goat,

    Excellent find. More info also from the FT:

    FT: Saudis drop WTI oil contract
    From January, Saudi Arabia will base the price of oil for its US customers on a new index developed by Argus, the London-based oil pricing company.
    The Argus Sour Crude Index will track the price in the physical market of a basket of US Gulf Coast crudes, including Mars, Poseidon and Southern Green Canyon.
    Argus said the change in policy reflected the “increased importance of the US Gulf coast sour crude market, in which both production and trading activity was rising sharply”.
    ——————

    I find it strange that the new index is still based on US output, rather than middle-east output. Perhaps this isn’t so significant after all?

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