Floating on a sea of oil

So remember a year ago all those rumours about oil being stored at sea? Well, now there’s so much of it out there that I’d think twice before swimming in any ocean for a while. One oil-watcher calls it “the largest and longest continuous glut of supply that I have seen in 30 years of following energy prices” and thinks the price per barrel could fall from the current $70-ish to $20 before the end of the year.

I don’t see how this is unavoidable; I’m still puzzled that it hasn’t happened yet. In the early part of the decade, post Asian currency crisis, oil prices were at $20 per barrel. Now, however, consistently weakening demand and massive oversupply isn’t leading to lower prices — yet another example of markets not functioning like they should.

Canada has become so resource-dependent that a serious fall in oil prices would cripple any nascent recovery for quite some time. Wonder what the mood is like at the Stampede?