The peak oil crisis: the Crash of 2008
http://www.energybulletin.net/node/46884
For weeks now the stock markets and commodity prices have been falling. Oil is currently trading around $76 a barrel which is close to a 50 percent drop since the middle of July.
Large portions of the credit world's markets are frozen, a situation which will lead to all sorts of economic problems if not freed up soon. The world's governments are thrashing around in an effort to revive the credit markets by throwing literally trillions of dollars at the problem, but so far there have been few readily observable results.
This week's plan involves having the U.S. and European governments spend hundreds of billions in a coordinated plan to recapitalize the banks. The general theory is that if the government owns all, or part, or at least guarantees the banks and their loans, nobody should be afraid of a bank failing, no matter how many bad loans it has hidden on its books. While the latest plan may eventually be enough to restore the credit markets, it seems unlikely to stem falling house prices, save Detroit, or reduce the steady increase in unemployment. If recent polls are valid, America's voters are becoming increasingly terrified of the future and are in a mood for major changes.
Despite the dramatic drop in oil prices during the last three months, recent developments have only made the supply and demand situation worse. Oil consumption in the U.S. has fallen by 1.8 million barrels a day (b/d) or nearly 9 percent as compared to last year due to a combination of high prices, a slowing economy, and the shortages resulting from the hurricanes that tore up Gulf coast production and refining last month. During September, however, Chinese imports increased by 2 million b/d as Beijing took advantage of the low prices to start building its strategic reserves -so much for falling American demand. The major oil forecasting agencies are now saying that the increase in worldwide demand for oil will slow from rates seen in recent years, but that worldwide oil consumption is still forecast to increase this year and next.