The prices of oil rose in recent days, but are now falling once again (as they did before last weekend). The reason is that the threat posed by storms is easing.
To oil installations in the Gulf of Mexico, that is. Florida is still very much in trouble; Tropical Storm Faye is ‘whirling towards’ this state.
What is most interesting about the fluctuations in the price of oil is that many thought it would continue to rise for quite a while, possibly a year or more. Experts were talking about $200, instead of $100 a barrel.
At this moment, however, one barrel of oil is $113. That is much, sure, but lower than expected and much, much lower than $200. That number, which sounded quite reasonable only a few weeks ago, now sounds completely ludicrous.
That does not mean that experts have no idea what they are talking about; more than anything else it is a sign of a changing world economy. In the changing world economy things happen rapidly. Prices are determined by the market, thus by companies and individuals. Additionally, when a certain product rises significantly in price, the market will try to come up with an alternative. As a result it will correct itself.
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The evidence is clear. The truth is that the speculators or excessive speculation is causing the drop. The speculator are not stupid and know that congress is working very hard to eliminate the London loophole and excessive speculation. Indeed it is the primary thing on congress plate. So the evidence is clear with the investor/ speculator pulls there money out of crude oil even among the Georgia crisis. They know know whats just around the corner for them!