Tuesday, April 04, 2006

buckets of oil

What a difference 20 years make in crude oil prices

I began writing World Oil's annual Crude Oil Outlook article on New Years Day, 13 years ago, when prices had just fallen below $14/bbl for the first time since 1986. At the time, conventional wisdom was certain that the world market had entered a new paradigm of ample, diverse supply. This was deemed to have removed a $10 "fear premium" that had been a structural aspect of pricing since the 1973 Oil Shock. Hence, most observers felt that prices ought to trade within a $10-to-$13/bbl range for the foreseeable future, bringing prices back to levels only briefly experienced in 1986, when a genuine supply overhang existed.

Matt Simmons waxes a bit sentimental on years of being correct, straining only slightly. The graph enclosed in the article stuck in my brain. Hey! Two can play at this sentimental game. I started blogging back in December 2004, right before the elevator ride of plateau oil pricing.

Welcome to the bandwagon, all you doomers who got on board at $60 a barrel!

And, heck, as long as I am posting charts, here is one for the bugs.

Those are inflation adjusted values - - note gold spikes lags behind oil, but does catch up...

Peakies. Know nothing bunch, we are.


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