Pretty neat graph here from FRED, showing the conventional gas price by week since 1990. Shaded areas are periods of US recession.

Despite the huge dropoff in oil costs as a result of the Great Recession, prices are more on target to keep their general upward trend for the forseeable future. Blame this on the rising energy consumption of not just China, but India and southern Asia in general, which has steadily become the textiles manufacturer of the world.

The main reason things will be okay is that a growing demand for energy transaltes into a growing demand for other commodities.  Oil prices increase because more people are getting jobs and commuting to work instead of staying in their moms basement. Similarly, when they go to these jobs they earn incomes which then translate as consumer goods purchased. All this takes energy.

Advertisements