I've been following the price of oil pretty much everyday since January of this year. Not even a week ago you could not find a news story that said we would ever see oil prices drop.
Now that it has lost $15 dollars in just 3 days which is more of a drop in 3 days than it has seen in the past two years there are 'optimistic' stories popping up everywhere. Some are saying the bottom could fall out of oil and we could be down once again to 50 to 60 dollars a barrel.
This is just nonsense. How can one week make the difference between doomsday reports of $200 a barrel and overly optimistic projections of $60 a barrel.
Something's amiss with the media. I'm thinking it's their lack of facts. I wish they would report on 'happenings' and stop reporting on 'could be' or 'may be'. They really suck at the latter.
It's actually pretty simple:
- Oil makes gains in stock - news stories of impending doom and outrageous prices cause thousands to read the stories - IE: profits for the media.
- Oil nets big losses in stock - shocking stories of extremely low oil prices cause thousands to read the stories - IE: profits for the media.
Anyone notice a trend? Who can you rely on now for good information instead of all this speculative hogwash? Shocking sells and the media has gotten very good at picking which stories are and which ones are not. Perhaps our media is our own worst enemy.
If you google on price of oil you will notice this is the current trend.
- Some are still overly pessimistic projecting huge price gains causing huge problems.
- Some are sort of middle of the road saying they are not sure what will happen next. Usually they sway from really pessimistic to really optimistic. Even though they try to be middle ground they come off as not being able to find it.
- Some are overly optimistic. Where did this come from? 3 days and the media is starting to change the trend of their stories? What happened to all the 'experts' who predicted this and that horrible thing. Now we have just as many 'experts' predicting the exact opposite.
All I know is basic economics. Supply and demand always win out regardless of who tries to cheat the system. Demand is dropping (like many of us already thought), reserves are at their highest since 1997, and the amount of petroleum being stored in the gulf on ships and in tanks is nearly overflowing. That is....if those sources are right.
Notice the current 'housing crisis' has almost been turned into a 'housing scandal' and investigation into illegal practices. I expect much the same for oil if the bubble starts to pop.