The Oil Prices Fallacy

With oil closing to $100 per barrel, I explored the history of oil prices and their correlation to a few items. My results are summarized in the chart below; click for a full-sized version.

First thing I found was that oil prices are nowhere near their peak of 4.54 grams of gold (AUG) per barrel. Today, Nov. 6, the price is at 3.6g AUG per barrel, or nearly a quarter lower than their peak. The price that changed was the price of the US dollar, not the price of oil (of course, prices are relative, but given the relatively low volatility of oil prices and higher volatility of the price of dollar I'd blame the dollar in this case).

Second, I'd like to point out to the longest run in oil price increase, which began with two mega mergers of oil companies and ended with another merger and the first electoral victory of G.W. Bush. Given the fact that during the same run there appeared to be a deficit in oil supply, possibly caused by increased refinery capacity (these two resulted in a decreased refinery utilization), I assume that the oil processing industry entered a time period of reduced competitiveness with two large conglomerates and four smaller companies. Once other companies merged to offer adequate competition to Exxon Mobil and BP, the price stabilized. Bush's election victory over Gore was also seen as a positive development, as the industry observers hoped that it would open access to new drilling areas, such as expanding oil production in Alaska.

One last observation, which is not apparent from the charts, is that the oil prices are highly correlated with refinery utilization (85%), and there seems to be a positive relationship between the two (regression with p=0.0004). Why this is so is anybody's guess; my assumption is that there is no shortage of refinery capacity in the US, and thus seasonal changes in demand for gas affect both the refinery utilization and oil prices.

Be it as it is, for me the most important finding was that oil is still far from its record price, and that it's unlikely it'll get there anytime soon. Unlike the US dollar, whose price keeps tanking.

Most influential Americans in politics

The Daily Telegraph has recently published the list of most influential Liberal and Conservative Americans. I've had some fun with the lists, and here are the results:

The grid is as follows: top-left position shows the most influential person, bottom-right the least of the top 100. Actually, top 101, as both lists had one field populated by two people; in the Liberals case with a man and a woman, thus the half-shaded gender box. The patterns tell part of the story: Conservatives are much more homogeneous, consisting primarily of white males. However, they also tend to be younger on top of the list, which came as somewhat of a surprise to me. As much as I'd like to see the "lame ducks" who most likely die before the mess they create can play out itself, I also understand that the longer a person is in the top echelons of a political system, the more influential that person is likely to become. The fact that so many Conservatives in the top 20 are below 50 indicates a possible lack of confidence in the older generation (a possible proof of this is the fact that G.W.Bush placed 21st).

One thing the pattern doesn't show is that there are virtually no Asians in the list. The only two Asian Americans are both conservatives, one of Indian and one of Filipino heritage. Also, it is important to realize that as with any such list, it is certainly not definitive. In fact, I'm expecting similar lists from other publications to differ from this one a great deal.

So who made it to the list? Here are all of them:

Liberals

Conservatives