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An oil economist?
Wednesday, August 01, 2007
This is one of the more off-beat stories in recent memory regarding oil prices - according to this report in the Houston Chronicle, an oil economist claims that the oil price is now rising because of 'nothing'.
Oil economist - the term looks funny and sounds funny.
For the longest time, many of us have been under the apparently mistaken impression that oil and economists mix about as well as, well, oil and vinegar.Oil prices shattered another record on Tuesday, settling at $78.21 per barrel, driven by the familiar drumbeat of energy demand outpacing supply.
Sure enough, according to his website, Dr. Verleger in indeed an oil economist, who, among other things, is an "expert on the economic structure of energy markets and the determination of energy prices."
No hurricanes appeared poised to ravage Gulf of Mexico oil production on Tuesday, geopolitical hot spots were relatively quiet, and economists weren't predicting big changes in the economic growth pushing China's thirst for energy.
So what caused the price to hit the latest milestone on Tuesday in particular?
"Nothing," said Philip Verleger, an oil economist who heads PK Verleger in Aspen, Colo.
Being such an expert on energy prices, you'd think he'd have something more to offer than what appears in this article.
3 comments:
I use Google Reader to subscribe to both your and Mish's feeds. Check this out: every one of your posts from both TMTGM and BadMacro are coming through, but July 25th was the last day I received any updates from Mish.
I tried resubscribing to his blog but I still get only posts up to the 25th.
The coincidence is interesting if nothing else.
I noticed that too with Bloglines. Blogger has some sort of trouble with some of the feeds - huge delays when it use to only be an hour or two.
I think the comment by the oil guy was sort of refreshing - nice and honest. We had an IT stock bubble based on absolutely no fundamentals. We have a home price bubble based on absolutely no fundamentals. So to see oil rising for 'no reason' is not all that surprising. The fact he was willing to admit that he had no idea is surprising though - most of these guys make up some ridiculous story to maintain the illusion of short term efficiency in market pricing.
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