15 December 2008

Will oil boil again?

Just a link to my article in the Business Standard newspaper last month, which discussed Hamilton's paper on oil prices – With crude forecasts moving from $200 to $25 in just a few months, the main point of my piece was : 'swings in crude oil prices will continue, as they are reflective of a market for exhaustible resources, a market which is near capacity and under stress. However, with such oscillations, there are no clear signals for investment in technology change, nor do they induce a search for alternatives to reduce dependence on fossil fuels. This compounds the problem in the long run. This is why a fall in the oil price should not lull people into complacency. This is why understanding crude oil prices is important.'