Futures Shock
It's official: oil prices just surged to a new record.
Which makes it a good time to point out what a bad job the futures markets can do of predicting future prices--which, ostensibly, is what they're supposed to do best. Take a look at the price trends for crude oil for December '05 delivery over the past 6 years (graph courtesy of Futuresource.com):
From 1999 through mid-2003, the futures markets thought that oil would cost less than $25 per barrel this December. Since then, the bet has risen to just over $55.
Now, really, futures prices aren't actually predictions of the future; they're just a mechanism to help both buyers and sellers reduce risk, by locking in prices in advance.
Still, it's worth noting that much of the time, people who look to the futures markets to predict the future are playing a sucker's game.
Shrimp Special
In the Snake River Birds of Prey Natural Area, biologists for the Idaho National Guard recently discovered a new species of fairy shrimp, hitherto unknown to science. (Click on the photo at left for a somewhat larger view.)
Pretty cool.
Fool's Gold, II
Further to yesterday's post, here's a flagrant example of the spurious security argument in favor of drilling in ANWR:
"I believe our dependence on foreign oil is a direct threat to our national security," said [US Senator Ted] Stevens [of Alaska]. . . "People fail to realize that our dependence on rogue states and militant states makes us weak. This dependence on outside sources of energy leaves our country vulnerable to the whims of these rogue nations." (from Seattle Post-Intelligencer)
Yes, and Alaskan oil is just as vulnerable to their whims as oil from the Persian Gulf.
The same article quotes a teenage girl from Florida, who claims that properly inflating all US car tires would save more fuel in a year than ANWR is expected to yield ever. (Don't quote me on that, I haven't checked the math. But I thought it an interesting comparison. Anyone know a source?)
UPDATE: The Senate voted in favor of ANWR drilling, by a margin of 1 vote. All California, Oregon, and Washington senators opposed drilling; other Cascadian senators supported it. The New York Times reports.
