You’ve just gotta love the mainstream media and their so-called experts! When oil went up to $145 a barrel, it was of course due to rising demand from increasing middle class populations in Asia.
Then, when oil became way overbought, it took a dive- all the way down to a low of $111. All during this price decline, these “experts” on the markets told us that “oil is dropping on lower demand world wide”. HAHAHAHAHAHA! That’s absolutely hillarious. There is either higher demand or there is not. People around the world do not just suddenly decide to stop buying gas. Sure, as prices rise, people will cut back. But this does not mean the demand ceases to exist!
The facts are that 1) the supply of oil in the world is limited (even perceived peak oil will have the same effect as true peak oil), and 2) demand for oil around the world remains unchanged in August 2008 (year over year).
If the demand is still there and there have not been any significant oil well discoveries in the past year, we have to search for a different answer other than the stupid media’s “prices drop due to falling demand” nonsense.
The truth is really not that complex. The trend for oil is UP. Oil is in a bull market. Does that mean it will skyrocket straight up with no pull backs? No, of course not. Just like gold, and stocks, oil will girate between being overbought and oversold. It will trade in a range. But $111/barrell oil is still higher than January’s prices and FAR higher than a year ago.
So oil, just like gold, is in an upward trend. Stay away from your T.V.’s and newspapers and annointed “experts”!
The markets never lie. Oil is in demand and the supply is dwindling. Keep it real.