Down how much last week? What's that again? I couldn't hear you...
It is true that there is a severe supply and demand problem in crude oil supply, but it is a long term problem. As is often the case, the time-scape of this problem is one of the most important parts of it. There clearly is not enough oil in the ground for humanity to continue using it in the ways that we have been doing. Growing demand in newly industrialized places like China and India exacerbates that problem. The solution to the supply problem in energy lies in new reliance on different ways to produce electricity. Cheap electricity would enable short distance drivers to use electric cars and could eliminate the absurd reliance on fuel oil to heat buildings in the deep north. That would produce a very different situation. Al Gore is calling for windmills, etc., but the real solution (as he says) is nuclear power. The Greenies will have to "suck it up" and accept the idea. Hey, the French get most of their electricity from nuclear power. The Francophobe crowd should take that as a challenge.
The short term problem is not the same. This is and has been a bubble generated in the ways that have been discussed in previous articles. Short term investment in the futures and spot markets have driven prices to levels unrelated to present supply and demand. The markets have recently been a fantasy world without real limits for movement on the up side.
The bells are now tolling for that fantasy. The smart people who stand to lose from this festival of childish greed have been kicking the psychological props out from under the process of finding bigger and bigger fools.
You don't think so? Good. It will be amusing to see how much money is lost in your disillusionment.
Sometime in the next few months the price per barrel will fall below 100/barrel. It will be interesting to see how far it falls below that level... pl