The Real Story Behind $100 Per Barrel Oil

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.