Weatherdem's Weblog

Bridging climate science, citizens, and policy

Oil Back Near $100/Barrel: Where Is The Demand?

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The price per barrel of oil is back up near $100 as of the end of last week and through today’s trading.  According to the free-marketeers, that must mean gasoline demand has been through the roof.  Oops, not so much: demand is down -4.3% YoY, at 8671 M gallons vs. 9056 M a year ago, as noted at The Bonddad Blog.

Clearly, something other than just demand is and has been at work.  Oil trading is as much gambling as the stock market is.  All the volatility that consumers are affected by arises primarily from large amounts of bets placed on anticipated prices.

Why is this important?  As NDD notes, “This [oil's price] is back above the recession-trigger level calculated by analyst Steve Kopits. Gas at the pump declined $.03 to $3.42 a gallon. Measured this way, we probably are still about $.15 above the 2008 recession trigger level.”  Those bets have real-world implications.  Recessions are easier to trigger when oil and gas prices remain high.

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One thought on “Oil Back Near $100/Barrel: Where Is The Demand?

  1. Pingback: Stock Market Oil Prices

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