Saildog

Crude Oil and Gasoline Prices: Like Déjà Vu All Over Again

This is article was written by somebody not well acquainted with oil production. All the usual stuff is in their about price, markets and technology; and its all rubbish, since oil production has already peaked. Now the rules are different. With a supply curve that is completely inelastic, price is determined by demand only; and that in turn is driven by economic activity. The oil price and economic activity will settle into a new relationship that will remain tightly bound. As oil production drifts down and absorbs ever more inputs, our economies will shrink accordingly. Of course it will be patchy and variable around the world. Some places with energy resources will do better and others without will do worse. But overall, Business As Usual is finished. Welcome to The Longest Recession.

Why Is Oil Trading at $53 When Supply and Demand Is So Bearish?

The article would have been better had the author learned something about energy.