IN JUST two months this fall, the price of crude oil plummeted from its peak of $77 US per barrel to just $57. Crude has recently rebounded to the $62 range. Were speculators who predicted $100 per barrel oil off track?
The world is awash in crude oil and OPEC is cutting back production. So what happened to the peak-oil theorists who spread doom and gloom about the world running out of oil?
In the oil industry, the only certainty is uncertainty.
Speculators have not had a stellar record predicting crude oil prices.
In 2004 and 2005, they predicted oil at about $21 per barrel, even though it hit $40 and $50. Even the venerable Economist magazine can be wrong. At the peak of the 1998 Asian crisis, it predicted crude at $5 per barrel, but it didn’t fall below $10 and then rose to more than $30.
None of the speculators predicted the uptick that began back in 1999 when crude dropped close to $11 a barrel after languishing at an average of $20 per barrel for 10 years before beginning its meteoric rise.
And so it’s no small wonder there is a lot of confusion for consumers.
Should consumers be concerned and conserve precious energy or continue to commute to large suburban homes in gas-guzzling SUVs?
The Chronicle Herald (Canada)
