Plunging oil price means cheaper petrol now – and no fuel later as industry investment shrivels

NVDL: Enjoy the cheap fuel fiesta because the future may be one where many of us go without any fuel for days and weeks at a time. Mark these words.

We enjoy the present then, at the cost of future convenience. This is due to the short termism of the market, and is further evidence that the way markets are configured is neither rational nor realistic - but merely sentiments roiling in rhymnes and some (but not sufficient) reason.

Oil prices ought to be $80 or more now. It is absurd that they are hovering around $50 given the stated depletion levels of oil fields, which are emptying quicker than demand is falling. For reference, China is still growing, instead of at 11%, now it's 9%. That's a 2% decline, but they're still growing. Meanwhile Oil prices have plunged over 60%. Crazy!

clipped from www.guardian.co.uk A snip at $48.50. Now that the price of a barrel of benchmark Brent crude continues to fall like a stone in the global recession, a drop of no less than two-thirds since the high point of $147.50 just four months ago, the relief is huge among motorists and hard-pressed consumers. If oil prices remain well below a certain critical level for any significant period of time, large amounts of investment in expected oil production capacity will simply be written off, and the consequence could then be a recovery-stopping supply-side crunch within little more than two years. That critical level is widely reckoned within the oil industry to be $90 a barrel. A current price as low as half that critical level is already forcing many companies to drop oil projects, and the banking crisis is also squeezing project financing for foreign oil companies operating in OPEC and outside.