Wednesday, November 26, 2008

Wrong! I wasn't very wrong at all. I was very nearly right.

My plan was to take a photo on 26th September 2008 as evidence of petrol being under $1 a litre in Townsville. Exactly two months later I can actually do this as followsevidence shot

My next prediction was for the low point of oil prices of light sweet crude. My theories are that the higher and longer the overshoot, the lower and longer the undershoot. Oil prices will stay so low for so long that we will begin to wonder if $100 per barrell will ever be tested again. More on the specifics another time


Jenny said...

diesel should drop soon too. The large demand from China for fuel to drive all the olympics tourists around has ceased. There will be an oversupply in the market as they stop buying so much & it will drop to the point that diesel cars are economic again. Maybe I should buy diesel.

word verification is very wordy today

Marco said...

Certainly the "opacity" of Chinese Olympics expenditure on fuel and diesel helped to make their increasing demand appear extrapolatable, while it seems they were happy to subsidise gasoline and stock up on diesel at any price to look good for the Olympics, and now have quietly reversed that policy. However, looking at the differential subsidies on diesel over gasoline around the world, the bubble in the diesel price (differential) has a good long way to go before it bursts.

Dr. Clam said...

I saw one of these signs the week before last in Melbourne, something I once thought I would never see again. I guess the market *isn't* the best way to reduce fossil fuel consumption... probably a good time to wade in with some heavy legislation to dampen economic activity and stop consumption that way... :P

Marco said...

I think letting all the struggling US auto makers go into chapter 11 would do a superb job in reducing worldwide fuel usage.