My modest attempts to understand energy economics have left me unprepared for today’s hundred-dollar-a-barrel milestone. With the U.S. economy teetering on the brink of recession, future demand is expected to be low, which the smarty-pants economists tell me should mean lower oil prices. Yet…
Thankfully for my ego, the folks at the Daily Diary of the American Dream are similarly puzzled:
The U.S. economy is slowing, and so is China’s. The growth in gasoline consumption is ebbing, particularly in the U.S., as three years of steadily increasing pump prices bite. The International Energy Agency has cut its forecast for 2008 oil-demand growth by nearly half a percentage point. U.S. supplies of crude oil and gasoline are rising.
So today, for the first time ever, oil closed above $100 a barrel. To be precise: $100.01.