In the summer of 2004 when oil prices were under $40 for barrel I remember some lunatics were forecasting a 80$/barrel oil. It was a hard thing to believe for most since there wasn’t anything to justify such a huge rise. Fast forward two years and see the public opinion do a 60 degree turn (not a huge fan of overstatements) on one of the most important issues humanity has to face. Today oil price is at 73 dollars per barrel and everyone is talking about it. Or at least gas prices at the pump.

You hear people toting that there’s no real reason for the price to be this high except for speculation and I suspect quite a lot of people buy this horsecrap. By the same logic, every asset out there is overpriced. Stocks aren’t at their “real price”, neither is real estate. Of course future price hikes are reflected in todays price.

Now, whether or not energy is overpriced is up for discussion. The point I’m trying to drive across here is simply that using the $40 or any other such figures as comparison is not going to fly. That was before the peak oil hype when prices were more in line with present day supply and demand.