Wednesday, October 29, 2008

Oil's Slide

"Signs that an enfeebled U.S. economy is using less and less oil sent world crude prices below $70 a barrel for the first time in 14 months, a dramatic turnaround for a market that not long ago had some analysts predicting $200-a-barrel oil as early as next year. ... U.S. benchmark crude on Thursday fell to less than half of its record high, set just three months ago, of $147 a barrel. ... Events over the past three months have stunned oil analysts as much as bankers and stockbrokers. ... The U.S. over the four weeks before Oct. 10 consumed about 18.6 million barrels of oil a day, a drop of 1.8 million barrels, or nearly 9%, over the year-earlier period", Neil King at the WSJ, 17 October 2008.

I'm surprised too. Along with the dollar bull market.

1 comment:

printfaster said...

I would correlate the 9+% drop in fuel consumption to a 9+% drop in real employment YOY.

Unemployment figures miss all the independents who work construction, and illegals. Admittedly some of the drop is people driving family sedans instead of their pickups to jobs, but most of it is indication of loss of economic activity and a drop in employment and employee hours.

Biggest effect should be on Venezuela. Hugo should be sweating.

Makes one wonder what the consumption figures are for the rest of the world. Europe cannot conserve more, they are down to rock bottom in terms what they can get from fuel economy. There the numbers will be a purer indication of economic activity.