Monday, September 15, 2008
A Brief Thought on Oil
A year ago, it seemed like any drop of a hat near any oil refinery was enough to cause oil prices to soar—rumors of the possibility of a workers strike, maintenance necessary for one of the plants—any excuse seemed good enough to drive prices skyward. Today, a hurricane slams in to the Galveston coast, and prices are still falling. At this point I'm convinced that refinery circumstances are unrelated to the oil spike, and hardly need to be considered an actual factor in oil pricing. It was probably a commodity run that has exhausted its course. Not that I'm expecting $1.50 gasoline prices again—growing worldwide demand and decreasing expandability of production are contributing. Where this all equilibrates remains to be seen.