Thursday, November 6, 2008

Oil Price Decline

Republicans have been claiming that the drop in the price of oil was a result of increased production thanks to their enlightened drilling policies. This assertion is patently absurd, as demonstrated by figures from the EIA.

These figures show that production has leveled off, and that any price decline has been a result of demand destruction.

The accompanying EIA report is slightly out of date. I also think that it fails to take into account the amount of air that speculators were blowing into the oil futures market.

I also think that they may be over-optimistic in their projections of non-OPEC supply growth. But at the end of the day, they agree with my assessment.