Oil bounces to $64 - Why?

I met with someone from ASPOSA [the Association for the Study of Peak Oil South Africa) yesterday. The consensus is that we are going to see successive cycles (spirals if you will) of energy prices dropping (thereby cancelling schemes and investments associated with higher prices). Then, as we get back into the habit of consumption, the energy prices will come back with a vengeance.

Watch closely: every time stock markets rally, energy prices rise. It is energy prices in the end, that kill the markets. Once upon a time these were dormant/stable. We are now very accountable to the use of these resources because we have reached a critical level in our consumption. The reaction to our demands will become proportionate more - will increase - over time, whatever theories you might hear about 'demand destruction', speculators etc.

The bottom line: too many consumers, too few (and continuously depleting) resources. Failure to address our consumption in fundamental ways means one result: higher prices.
What happens though is the state of flux further confuses and deludes the wishful thinkers amongst us who are hoping for a respite and a bottom. The result is that we are tempted to wish, to hope, but ultimately do nothing, when a great deal of difficult change is necessary.

I will write more on this topic later in the week.

clipped from biz.yahoo.com SINGAPORE (AP) -- Oil prices bounced off a 17-month low Wednesday in Asia as a rally in stock markets around the world boosted investor confidence that the worst of a global economic slowdown and its impact on crude demand has been priced in. Light, sweet crude for December delivery rose $1.91 to $64.64 a barrel in electronic trading on the New York Mercantile Exchange by midday in Singapore. The contract overnight fell 49 cents to settle at $62.73, the lowest closing price since May 15, 2007.