PowerSwitch

...that compares the actual trends in oil prices against the previous year's 1-year forecasts, or anything like that?

I assume there is a reason why we have falling oil prices everytime I look at the indicator, but...

The other reason being that when I look at older threads on here, it always seems like people were pessimistic or assumed something bad would have happened by now, and it didn't.

Obviously no predictions are going to have a great deal of accuracy, as things like the price of oil are complex systems with many unpredicatable variables. But just out of interest...?

You could have a look for some of Khebab's (Sam Foucher's) posts on TOD. He did regular posts looking at a large variety of predicitions,


Peter.

You can also take a look at the graphs in my software.

It used to be a game at TOD to compare oil price forecasts by Daniel Yergin with the actual change that occurred. In the long price run-up to $147, Yergin predicted at regular intervals that oil was overpriced, and would fall sharply in price. He was wrong every time, until it reached about $130 when he admitted it would go higher. A couple of weeks later the price crashed.

Since then, no-one has predicted oil prices very well. The price is a subtle balance of supply, demand, OPEC quotas, economic crystal gazing and speculation.

I personally suspect that OPEC has some hidden mechanism (perhaps floating storage?) which is fine-tuning supply and demand to keep prices in the $70-$80 range. For the last 18 months it has hardly budged, and the speculators have lost interest.

You could start one now with the figures at the bottom of the page, it's surprising how quickly a year goes by!

the_lyniezian wrote:The other reason being that when I look at older threads on here, it always seems like people were pessimistic or assumed something bad would have happened by now, and it didn't.

Urm, where have you been the last couple of years!? Didn't you see the economic recession affecting most of the world? That was the "something bad", that depressed economic activity and so too demand for oil. Demand fell faster than OPEC and natural depletion could reign in supply so prices fell.

It turns out the global economy can't support $100+ oil for long without contracting - it's an upper limit on energy, at least the way the economy is structured today. It's impossible for the price just to keep going up, too many people get priced out and demand falls below supply.

clv101 wrote:

the_lyniezian wrote:The other reason being that when I look at older threads on here, it always seems like people were pessimistic or assumed something bad would have happened by now, and it didn't.

Urm, where have you been the last couple of years!?

Precisely.

emordnilap wrote:

Prono 007 wrote:The start of the downslide will be different

There are many people apart from myself who feel that 'is' should replace 'will be'.

clv101 wrote:

the_lyniezian wrote:The other reason being that when I look at older threads on here, it always seems like people were pessimistic or assumed something bad would have happened by now, and it didn't.

Urm, where have you been the last couple of years!? Didn't you see the economic recession affecting most of the world? That was the "something bad", that depressed economic activity and so too demand for oil. Demand fell faster than OPEC and natural depletion could reign in supply so prices fell.

It turns out the global economy can't support $100+ oil for long without contracting - it's an upper limit on energy, at least the way the economy is structured today. It's impossible for the price just to keep going up, too many people get priced out and demand falls below supply.

Heck, I know something bad was in fact happening, but the way it looks, it's as though people were really expecting TSHTF to have happened by now, and we'd all be in a mega-collapse.

Perhaps it just doesn't seem so bad as neither of my parents' jobs got affected, nor my benefit payments; only that the prices of a fair few things went up, interest rates were disappointing, and maybe we got slightly less work sorting the Christmas post in 2008 and 2009 than in 2007, which I wasn't sure whether it was the recession, the internet or what. But all in all, it wasn't the massive crash some seemed to have been expecting.

It also might be debatable whether the high oil prices were really the reason for the recession, and not the credit crunch business. (Then again, one might wonder why people couldn't pay their loans...)

the_lyniezian wrote:Heck, I know something bad was in fact happening, but the way it looks, it's as though people were really expecting TSHTF to have happened by now, and we'd all be in a mega-collapse.

That depends on whether you were expecting one gigantic turd to hit the fan, or something that starts as a trickle of diarrhoea, and could turn into a flood if we don't change our diet .

the_lyniezian wrote:interest rates were disappointing

I may not be typical, but while I was travelling I was living on the interest from my house sale and savings. The change to a "disappointing" interest rate made the difference between being able to continue that lifestyle indefinitely, and having to totally change it. We can argue about whether interest is a bad thing, but changes like that can have a big impact on people.

PS Sorry if anyone was eating their lunch .

We are still sheltered to a large degree from the extent of TSHTF by the financial system having been shored up by governments taking on insurmountable debts which the Chinese and oil exporters have not yet called in. The global recession has avoided oil shortages for now. We are only now building up to massive cuts in public spending which will cause major pain to the low paid, vulnerable and sick. Councils are preparing 30% cuts over 4 years. In practice one in three council employees out of a job.

For those who manage to keep paid employment, especially above average incomes, will weather the cuts fairly well, apart from rising crime.

However, that is just the first few years. Once depletion sets in at 3% or more a year then things will get nasty.