Interesting addendum (posted later the same day). Headline from HuffPo:
Oil Prices Plunge In Record Sell-Off
NEW YORK -- Oil prices took a nosedive Thursday in a historic selloff, erasing weeks of gains and indicating that the months-long climb in energy prices may have hit a ceiling."The market's own internal dynamics" - that doesn't translate to simple supply and demand...
Crude oil plunged 10 percent as startled investors unloaded their positions and a weeklong decline accelerated into an outright freefall...
"There was no triggering single event of news that would account for this. It's just much more the market's own internal dynamics taking prices down here," Richards added.
Second addendum: Best article I've found on the selloff is the one in the Wall Street Journal.
Unchecked, unregulated speculation.
ReplyDeleteThat's kind of cute, in Germany a gallon costs about 9 dollars :)
ReplyDeletethe graph is deceptive as it is doesn't have any standard scale of progression for price. (note 0 to 2.5 is an awfully short distance)
ReplyDeleteAm I the only one that is bothered by the fact that the chart is labeled for 2009-2010?
ReplyDeleteWhat Steve said.
ReplyDeleteThere is no real reason for a price spike other than that some exec wants a new yacht.
Looks like they mis-labeled the chart, as JPinnix pointed out.
ReplyDeleteI'm willing to bet a tank of gas the major oil companies report yet another year of record profits in 2011 after these sharp increases.
Note the interesting addendum I just appended to the post...
ReplyDelete"The market's internal dynamics."
ReplyDeleteInvestors are gamblers, that is what they are doing - gambling.
As such, they are prone to superstitions and rumours.