tag:blogger.com,1999:blog-13900197.post3963211444893132541..comments2023-10-15T05:20:00.675-06:00Comments on Entropy Production: Normalized Crude Oil PricesRobert McLeodhttp://www.blogger.com/profile/05270962906437456350noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-13900197.post-37609849750993884222011-07-02T02:32:05.220-06:002011-07-02T02:32:05.220-06:00Hi,
I recently had a discussion with my friend ab...Hi,<br /><br />I recently had a discussion with my friend about oil prices, and this is how I found your blog. <br /><br />The friend, who I debated with, supports widespread theory that the rise in the oil prices in 2000+ is the result of the wars in Iraq and Afghanistan. He later refined his point of view, claiming that the cost of wars resulted in deflation of dollar, which resulted in the increase in oil prices.<br /><br />I am not an economist, but a physics researcher, so my main objection was based on the graph showing the dependence of oil prices on time: it seems that a straight line is a rather good fit to the price increase. But a good fit would start at the dip in 2002 or even in 1999 and continue well beyond the Bush's presidency. So the correlation between the wars and the price of oil is doubtful. In addition, apparently most of the local features in the graph are explained by "oil events" unrelated to the wars.<br /><br />I will appreciate your opinion or useful references.<br />In particular:<br />1. Do I understand correctly from your post that the dollar deflation alone (regardless of what caused it) cannot account for the rise of the oil prices?<br /><br />2. Do you think there is any significant/systematic relation with the wars in Iraq and Afghanistan?<br /><br />Sorry, that this sounds too amateurish. I appreciate your help.Vadimhttps://www.blogger.com/profile/06904507368259203214noreply@blogger.comtag:blogger.com,1999:blog-13900197.post-20826070771746458572008-01-26T08:04:00.000-07:002008-01-26T08:04:00.000-07:00I enjoyed your analysis of the oil price data. Th...I enjoyed your analysis of the oil price data. The headline grabbing spot prices don't tell the whole story. <BR/><BR/>The investment cycle in oil and gas is just getting started. The multi billion dollar projects are based on long term increases in the oil prices.<BR/><BR/>I'm following the Alaska Gas Pipeline on the blog: http://alaska-gas-pipeline.blogspot.com/<BR/><BR/>I'm also interested in the development of Canadian Oil Sands and the relationship between the planned gas lines (AK and McKenzie) and how US refineries cut the cord with Hugo Chavez and his 2MMBPD of heavy sour crude.AK Engineerhttps://www.blogger.com/profile/14212732718869625585noreply@blogger.com