Oil Price Collapse: I Can Buy A Gas-Guzzler, Right?

When it comes to predictions on oil, nearly everyone is wrong most of the time. Put us in there; four months ago I wrote about “irrational complacency in the market”. 

“In a market so heavily traded on futures, as is the global oil market, uncertainty can send a market into an upward gallop as readily as it can send traders rushing to the lifeboats,” I warned.

That seemed a sensible position at the time. It was, and is.

Then the market, already in a tailspin, collapsed.

But if you’re thinking of buying a car right now, can you rely on ‘cheap oil’, and, ipso facto, cheap petrol and diesel, for the next few years? 

Well, no. As we also warned in September - and we got this bit right - the price of oil can turn on a nail.  

As it did in 2007.

Then, the global benchmark light sweet North Sea crude, Brent Crude, went from US$55 a barrel at the beginning of that year, to US$95 in December, and by July 2008 it had risen to a high of US$145.85 a barrel.

Hourann Bosci, Flickr.)