Thursday, October 9, 2008

Why you should never forecast prices

We live in strange, rapidly changing times. Just trying to keep up with the latest news on the financial crisis is practically a full time job. Last week? Might as well be talking about last year. 3 months ago? It’s like the swinging 60s are back again!

In this spirit, I want to publicly admit that I was wrong. I’ve spent a lot of time writing about oil prices on this blog, and it’s plain to see that the prediction I made about a $100 price floor for oil was... quite misguided. I still think I have the supply and demand fundamentals right, but I realize now how remarkably little I understand about pricing in oil markets. A $100 floor, which seemed reasonable in July, now looks rather absurd.

I still intend to theorize on the fundamentals and whether they will shift prices, but I'm going to shy away from price predictions.

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