According to an article by the BBC, a single, overpriced, purchase sent oil prices to a record $100 per barrel on Wednesday. It seems that some brainless freak bought the minimum quantity possible and immediately sold it at a $600 loss. As the article says, “He paid $600 for the right to tell his grandchildren that he was the first in the world to buy $100 oil.” Okay, so we are still a capitalist nation and he had every right to pay whatever he was willing to pay. Heck pay $1000 per barrel if you really want to impress the grand-kids. However, $100 per barrel is a dubious milestone that could have real, negative impact. Here are some examples:
As soon as word got out, I’m sure there were some gas station owners rushing out to increase gas prices in anticipation.
It could cause further erosion of consumer confidence, resulting in a pullback in consumer spending–pushing us closer to a recession.
Happening the day before the Iowa caucus, it could have influenced some votes.
Having said all that, oil went on to set a new high of $100.05 on Thursday–this time, “for real.” I just think it’s amusing (and sad) what people will do to get attention.