Don’t let speculation distract us from peak oil
29 Aug 2011
Over at Econbrowser, economist James Hamilton—who has done a lot of excellent work on oil prices—takes a look at how much of a role speculators may have played in oil prices.
His conclusion: speculation probably played some role, but don’t let this blind you.
As he puts it:
I would like to see more consensus on what seems to me to be a very clear statement of fact, which is, stagnating global production is by far the most important reason for a rising price of oil.
Insofar as discussion of commodity futures speculation causes some people to ignore this critical reality, I fear that it may be doing us a significant disservice.
For the record, Hamilton does not specify in this post whether he thinks that this recent stagnation is necessarily the peak of global oil production. But he is generally worried about peak oil.