We often hear of the "Austrian School" of economics, or of the "London School," or of the "Chicago School.
" I would use the word "school" in another sense - identical to a "gaggle," a "flock," a "pack," or a "herd.
" Indeed, economists are a "herd" all to themselves; and as is the case with all herds, they indulge in group-think; that is to say, they speak to and with each other in round-robin terms, and when one idea begins to reach acceptance it becomes a self-reinforcing process as the conversations and opinions spin 'round and 'round.
Such is the case with Crude Oil.
We are told that the "fundamentals" simply require that the price of Crude Oil must rise higher and higher - because of intractable demand increases in China, India, Malaysia, and other Far Eastern countries, among other reasons.
One problem with the hypothesis is that the foreign increase in demand is not a foregone conclusion.
Much of foreign demand is being maintained at a high level by price subsidies, which are paid for out of the public treasuries in order to keep the local economies running and, especially in the case of an ever-worried China, to stifle dissent and outright resistance.
China is holding its breath with fingers and everything else crossed, hoping to just get through the Olympics without a significant uprising.
Within our own shores, we see that absolute demand for gasoline is falling.
Demand for fuel oil this coming winter may fall too, as families cut way back on household heating in the face of crippling prices for fuel oil.
Airlines will be significantly reducing their schedules after Labor Day, which will reduce demand for jet fuel as compared with recent years.