I was originally attempting a means by which to compare commodity prices like oil to a measure of production by which to determine whether a commodity is over or undervalued. Instead I just came up with another chart that explains (yet ONCE AGAIN) why it isn't Exxon or BP or "Big Oil" jacking up prices, as much as it is the fact the world economy is growing faster than oil production and therefore (revisiting the basics of economics 101 which most people don't get during their education) since demand is exceeding supply, prices have gone up.
They didn't have 2008 figures which I'd be curious to see with this last spike, but yeah, my apologies to all you freshmen and sophomores in college out there, apparently it isn't Dick Cheney and Haliburton just trying to piss you off. It's just simple economics.
Of course we could allow for drilling offshore or in ANWAR which would increase supply and thereby lower...oh heck, never mind. I'm foolishly assuming people care about lowering the price of oil when in reality
these people want nothing more than to destroy the US economy.
Do you ever feel like you're shouting into the darkness and there's no one there to hear you. It probably comes down to the need to have someone to blame. It's way easier to blame big oil then it is to admit that we owe too much on our credit cards and now are pinched by an increase in our cost of living that we failed to anticipate because we were too busy buying things on credit.
ReplyDeleteErm. You forgot oil consumption. Richer nations are more efficient at oil consumption, and will become even more so as prices increase.
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