Don't Be Fooled

Oil continued it's two week slide, good news for those at the pump, as the dollar continues to strengthen and demand falls. Still, oil remains above $120 a barrel and I'd be totally surprised if it falls much more. Supply continues to be tight, global oil production most likely peaked in May 2005 and despite high prices, demand isn't falling enough domestically to offset increases in demand in the Middle East and China. As we continue on this bumpy plateau that is characterized by jumps and declines in production, ups and downs in demand and just in time supply, expect to have wild price swings like the ones we've experienced the past few weeks. My point is, don't be fooled by the recent declines in the price of oil as we are at the global peak in oil production. Once we fall off this plateau, it's all downhill and it could be kind of steep.

1 comments:

JACQ | August 4, 2008 at 9:56 PM

It's $3.81 around the Pittsburgh area right now. That's painful enough. Especially with the situation Missi and I are in right now, which is rather precarious.