Does queueing theory explain oils wild price swings?
Kurt Cobb resourceinsights.blogspot.com August 11, 2008 To paraphrase Mark Twain, rumors of the oil bull market’s demise have been greatly exaggerated. With crude oil down a mere $30 from its recent peak, many economists and financial analysts are proclaiming the end of the oil bull market. They seem to have forgotten that not too long ago the entire distance from zero to the oil price was only $30. While no one can predict the future of oil prices with certainty, there are explanations for the recent price decline consistent with an ongoing bull market. First, let’s summarize the arguments for the bears. The proximate causes of oil’s pullback are said to be a slowing world economy, demand destruction and new supply. Certainly, there is some evidence of a slowing economy, and this very well might reduce demand for oil. Then, there is demand destruction. High prices force some users to cut back on consumption, and this also may have happened. Finally, there is new supply. Large finds no
