On Sunday, September 24, 2006 I wrote "I am confidently predicting that on this day in 2008, the price of petrol will be under $1.00 Au per litre in Townsville."
To which Anonymous replied:Today is 7 May 2008.
Given that the price is already in the $1.40 to $1.50 range and the price of oil has tipped US$120/barrel, I'd say that the alarmists win.
Well, I am not anywhere near conceding, the reason I indicated the same day is that I wanted to rule out seasonal factors. The oil price spike has since spread to a raft of energy and agricultural commodities. By predicting Townsville prices it also disconnects my prediction from distorted markets. I did not predict a gradual lowering of prices, but an overshoot followed by an undershoot. This has not got past the overshoot yet, and I await patiently for a triggering event of say the Olympic Games to get me there before my self-imposed two year limit.
6 comments:
Well, I hope I'm not an alarmist, and I definitely am not anonymous, but I'd say your campaign is on the ropes, Senator. I really don't think the Beijing Games- which will either be either merely the latest round of the Olympics or an unmitigated flop due to [politicisation of sport/acts of opportunistic terrorism/Tibet-based anger/pollution-based anger/other] - will have anything other than a mild bump in the road effect one way or the other.
Actually ending that war in Mesopotamia might, but even in the unlikely event that happens before September, I doubt you'll be seeing sharp drops at the servo in the short or even medium terms.
My hopes of victory natched from the jaws of defeat rest on a number of historical precedents. *At the end of the oil shocks of the 70's, oil prices nosedived very quickly.
*The marginal price of getting oil out of the ground from OPEC countries has gone up very little since oil was $20 per barrel.
*The Aus $ is likely to be "stickily" high even after the oil price stops overshooting.
*The governmental controls exacerbating the oil price may send some countries so close to the wire that demand may yet plummet in many subsidising countries.
*Before most stock-market crashes, most investors believe that things had reached a "high plateau" rather than the edge of a cliff. Same goes with energy commodity prices.
To conclude, I still affirm that petrol prices will plummet eventually, however it may yet be an incalculable time away.
I think the underlying rate of inflation is such that its *very* unlikely you'll see that price again in Townsville- barring some insane act of excise-trimming populism- but in general terms I agree with you, Marco.
This isn't the Club of Rome's apocalypse, just another speculative bubble, driven by the perception that unsustainable rates of growth in China will continue forever. But the US is still the same fraction of the world GDP that it was 30 years ago, and when consumers there pull their heads in, those growth rates fall, and the commodities bubble goes pffft.
Last time I checked I was still waiting for a rational counter-narrative on Mesopotamian War, BTW. ;)
Yes, and one cannot see the the edge of the cliff if you are walking backwards admiring the view. Novice oil speculators beware!
Precisely four months to go now.
BS Bro, it may be an overspike, but the underspike aint going to reduce the price to $1 at the pump in Townsville ever again.
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