A meteoric rise
Last year was a pretty remarkably bad year for oil markets. That is, “bad” if you are a consumer of oil. Good if you are a seller somewhere along the supply chain. Observe this amazing performance:
(Apologies for the low quality. Blogger insists on resizing the figure and converting it to a jpeg. I am unspeakably annoyed.)
Aside from a few hiccups along the way, this is a pretty astounding, exponential climb in price, 2.5-fold in only two years. This is amazing behavior for a commodity. For some perspective we can look at data from the Bureau of Labor Statistics. Here’s the average price for fuel oil in the U.S. compared against white bread for the past three years:
Meanwhile, here’s the behavior of the same two commodities during the 1990s:
This is not quite indicative, since the price of fuel oil in the U.S. is subject to many non-market forces, but it at least suggests that there’s a sea change going on in the oil world. It ought to be an interesting year.
posted by saurabh in Uncategorized | 3 Comments
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