Could oil prices increase exponentionally ? 4


This is the question as we are breaking record high prices. To Reuters: ” Brent oil priced in euros hit a record high on Thursday on heightened tension between Iran and the West while U.S. stocks neared peaks not seen since 2008. “

” The rise in Brent, the benchmark for European crude and most international oil trades, poses a new headache for cash-strapped Europe, still reeling from a two-year-old sovereign debt crisis.”

When I wrote the post on the increasing prices of oil, I noticed that – despite my low level in advanced mathematics – the price curve looks like the beginning of an exponential.

So I took an example of an exponential curve – in green – and pasted it next to the oil prices curve – in blue. Guess what : they are almost the same.

So unless the demand drops again – because of a massive recession, a war or any other unpleasant event – I am all too willing to bet that oil prices will keep on increasing exponentially.

To further exemplify my point of view, I would like to remind you that in the 1990s oil prices were between 10 and 20 USD, when I was writing my monography on the oil industry in mid 2006 they already were at 66 USD.

Nowadays they are gravitating at 110-120 USD, a level previously thought as potentially disruptive to our economies.

You know my opinion : the sooner we get rid of oil as a main resource of our economies, the better.

Also see : Forbes, Tired Of High Gasoline Prices Already? We Ain’t Seen Nothing Yet


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4 thoughts on “Could oil prices increase exponentionally ?

  • green investments

    Hi Edouard:

    I completely agree with you. In fact, have you seen the news about Nomura predicting oil at 220 USD? What’s interesting about the Nomura prediction is it focuses on oil stoppages from Libya and Algeria. That doesn’t even begin to take into account the affects of an attack on Iran. Here is the Nomura piece: http://www.cnbc.com/id/41752844/The_220_a_Barrel_Oil_Call_and_the_Risk_Trade. And of course, the fear-factor kicks in and the whole thing becomes a self-reinforcing cycle.

  • green investments

    Edouard:

    I am British and indirectly involved in the “green” business on the investing side (big in the UK by the way), and you do an excellent job. Lots of good info on your site and I visit on a regular basis. One of the better green blogs out there. I’ve seen a lot that are bollocks, but you put your heart into it – keep up the great work mate!

  • Edouard Post author

    Thanks a million for appreciating my work.

    It indeed takes A LOT of time but I do it because one day I want to work in the cleantech and related sectors. I have been fascinated by solar for almost eight years now…

    Don’t know if you have had the chance to read my selection of tweets.

    Hope you will keep on appreciating my humble work. 🙂