Spending record for gasoline. (page 1 )
Another look at rural fuel expenditures. (page 2 )
Foretelling Petrobras future? (page 2 )
Don’t worry your oil is safe. (page 3 )
Ocean Acidification? (page 3 )
Bio-everything sounds so Green. (page 3 )
Looking at 2008 from the wrong side
As new highs for oil prices are reached, a Bloomberg headline similar to this one usually leads the news. “Oil Trades Near Highest Since September 2008 on Libya, Mideast.” While this may make a good headline it doesn’t provide any insight into the current situation.
The problem with this perspective is it is on the wrong side of the energy spike curve of 2008. By September the price of oil was declining rapidly due to the unraveling of the financial system and the steep recession that resulted. To get a better sense of how today’s price might impact the economy attention should be on the upward slope of oil prices in 2007 and into the first half of 2008.
Therefore the fact that world spot oil prices are now averaging very close to $100 per barrel is far more important than how it compared to prices in the fall of 2008 when everyone thought the world was ending.
The graph below shows just how far the price of crude has come from the lows of 2009 during the depths of the recession. Economists warn about the rapid rise of prices being more important than the level when it comes to impacts on the economy. Well a 135% move in two years seems steep. There is more on price and its impact on consumption in this week’s report.
Click graph to view larger image.