Oil was $140 a barrel on Monday, now it's below $133 a barrel either because Vladimir Putin farted or the U.S. released its fuel stock figures — we're not sure. Is Peak Oil real, or is the myth driving investors to get nutty with an otherwise healthy market? A decade ago, when oil was cheap, it was a "controversial theory," reported in the San Francisco Examiner, that predicted the party wouldn't last very much longer. So why was the conventional wisdom of OPEC fantasists, who warned of "$5 oil," so laughably bogus? (The Economist devoted a cover story to it; see left.) Who made false predictions then, and who's really talking sense about the state of the industry now?
New York Times - October 1988:
"As the price for crude oil slid below $10 a barrel in the spot market last week and OPEC officials warned that it could sink to $5, an uneasy sense of deja vu pervaded the world. The sharp decline stirred memories of the price plunge that occurred in 1986, sending economic shock waves through oil-producing regions, including the American Southwest."
New York Times - February 1990:
New doubts about the world's ability to pump enough oil to keep pace with growing demand have convinced many analysts that oil prices will rise much more rapidly than previously expected, by about 50 percent within five years.
The Economist - March, 1999:
"Now the long oil-price odyssey seems at an end. Since its peak in 1980, the price has fallen erratically. It has plunged by half in the past two years alone. In real terms, oil now costs roughly what it did before 1973. Crude is gushing from the ground at the rate of 66m barrels a day, half as copiously again as in OPEC's prime. The world is awash with the stuff, and it is likely to remain so."
The Telegraph - May 2008:
“There are simply no buyers because the market has more than enough oil,” says its Opec representative, Hussein Kazempour Ardebili. The oil cartel’s estimates are almost the opposite of Wall Street’s: 88.75 million barrels a day of supply and 86.8 million barrels a day of demand.
The Hindu Times (Vipin Chandran) - May 2008:
"An evaluation of the oil and gas futures and options markets seems to be indicating that supply is sufficient to meet current demand and the oil price increase seems to be overdone with speculative interests in abundance. I believe we are nearing a steep correction in oil prices."
