At about $124 a barrel, the price of crude oil has more than doubled since the start of 2007. The vast majority of government forecasters, stock analysts, economists, traders, and journalists who follow oil failed to see it coming. Even now their price estimates for the next several years are all over the place, ranging from $70 to as much as $500. How can that be?
It’s hard to predict what prices are going to do in the next month, much less the next five years, if you don’t have a handle on current supply and demand. The problem is that the analysis requires data on production, consumption, and inventories—and those numbers are largely unreliable. The situation is only getting worse: China, the world’s fastest-growing oil consumer, is also one of the most opaque. Regrettably, the world oil market is no more transparent than a barrel of extra-heavy Orinoco crude.
Documentary: The Middle East & The Oil Crisis
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