Oil Prices: Must They Go Up Because Charlie Gibson Says So?
Charlie Gibson stated at Saturday's GOP candidate debate that "intellectual honesty" required admitting oil prices can only go up. Cato's Jerry Taylor thinks the evidence suggests that those with most to gain or lose from accurately predicting oil price fluctuations seem to think the opposite:
Oil prices might indeed be on a rocket ship upwards for as far as the eye can see, but market actors don't think so. At the New York Mercantile Exchange, oil for delivery from next month through December 2016 is showing a downward price trend. In short, the people with the most money on the line—who will live and die (economically speaking) by these assessments—aren't buying Gibson's assertion about the future.
More evidence can be found the behavior of oil inventory holders. At present, oil inventories are being released to the market –hardly what one would expect if inventory holders thought that oil prices will continue their long march upward.
Ron Bailey from our May 2006 issue on the "peak oil crisis."