The general perception was that we would get oil prices inching ever upwards, an erroneous perception of course. But people really bought in to that idea. Predictions were made that $50 oil or $60 oil would make markets collapse. And not just by odd men on the internet with a healthy imagination. Even here on Resource Investor this columnist thought $80 crude was a shoe-in in 2006. Sure, we got to $78.40, but still.

But there are too many technical sides to markets, in the simplest sense, long and shorts. They prohibit the straight lines on the graphs. When something goes long, eventually enough people have a vested interest in shorting it. We have things like software driven spikes or dips, and year-ends. As in 2005 and 2006 the price has been artificially distorted by the year-end, too low in 2005, too high in 2006….

So one analyst this week, who shall remain unnamed here, was talking about $35 crude on technical grounds. Well, that may turn out just to be the other side of the peak oil coin, expecting the price to keep falling.

But of course a drop in price to $49.90 or even $35 really does not signify anything as regards ‘peak oil’. Unhappily for those who thought peak oil would bring about overnight collapse of the U.S. and world economy, whenever peak oil arrives - tomorrow or in a hundred years - it will be a far slower and more drawn out process.

One of the central planks of some ‘peak oilers’ intent on collapse Armageddon-style, was the idea that an oil-induced recession would be coupled with ever rising oil prices. We are not yet at that state. Even major ‘peak oil’ proponents like Chris Skrebowski in London, the editor of Petroleum Review, think that any peak will be delayed by some kind of combination of recession and over capacity.

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