05 May 2011

Graph of gasoline prices

From an article in the Wisconsin State Journal, which raises the question as to whether this is a temporary "bubble" caused by world geopolitics and seasonal and refining changes, or whether it is the forerunner of a longer-term trend.

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.

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.
"The market's own internal dynamics" -  that doesn't translate to simple supply and demand...

Second addendum:  Best article I've found on the selloff is the one in the Wall Street Journal.

8 comments:

  1. SteveMay 5, 2011 at 12:27 PM

    Unchecked, unregulated speculation.

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  2. JonathanMay 5, 2011 at 12:48 PM

    That's kind of cute, in Germany a gallon costs about 9 dollars :)

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  3. JDJarvisMay 5, 2011 at 12:51 PM

    the 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)

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  4. JPinnixMay 5, 2011 at 1:15 PM

    Am I the only one that is bothered by the fact that the chart is labeled for 2009-2010?

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  5. Mete PackMay 5, 2011 at 6:59 PM

    What Steve said.
    There is no real reason for a price spike other than that some exec wants a new yacht.

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  6. MikeMay 5, 2011 at 11:11 PM

    Looks like they mis-labeled the chart, as JPinnix pointed out.

    I'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.

    ReplyDelete
  7. MinnesotastanMay 5, 2011 at 11:34 PM

    Note the interesting addendum I just appended to the post...

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  8. Sue DunhamMay 6, 2011 at 9:03 AM

    "The market's internal dynamics."
    Investors are gamblers, that is what they are doing - gambling.
    As such, they are prone to superstitions and rumours.

    ReplyDelete