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Sure, the prices of oil and natural gas go down sometimes, or grow more slowly, because of increased supply, but let’s look at the graph of oil prices post-WWII

Sure, the prices of oil and natural gas go down sometimes, or grow more slowly, because of increased supply, but let’s look at the graph of oil prices post-WWII: https://www.macrotrends.net/1369/crude-oil-price-history-chart https://www.macrotrends.net/1369/crude-oil-price-history-cha... The first big crash was at the end of 1985/the beginning of 1986, which Wikipedia says was due to falling demand (e.g. people consuming energy): https://en.wikipedia.org/wiki/1980s_oil_glut https://en.wikipedia.org/wiki/1980s_oil_glut There was a temporary spike in 1990 after Iraq invaded Kuwait. I guess you could argue that the price went back down because the supply changed. There was a crash in 1997–1998 that was partially due to increased supply but also due at least in part to the Asian financial crisis. The next big crash was from June 2008 to February 2009, again due to a large financial crisis. There was another crash in June 2015-February 2016 due to a stock market crash in China, and finally we get to the massive crash this year driving futures prices negative, which was of course due to COVID-19 reducing demand for travel.

runako 6y ago
The thing to keep in mind re: oil in particular is that a stable oil price is indicative of increases in supply to match the more or less continuous increase in demand over most of that period. The big dislocations you cite obscure the fact that demand rose for most of the period, demand was rising. So another way to read the chart is that demand-weighted prices declined most of the time, with occasional spikes. Either way, you can see in the charts the increased supply effect of e.g. fracking being deployed widely in the price response. One could also look back to 2008 to see the impact of increased supply on pricing of e.g. real estate.
- rlanday 6y ago
  2008 was, again, a demand crash: a lot of people could no longer afford to pay their mortgages and speculators stopped buying properties under the assumption that they would be guaranteed to be able to resell them at a profit after a relatively short period of time.

runako 6y ago

The thing to keep in mind re: oil in particular is that a stable oil price is indicative of increases in supply to match the more or less continuous increase in demand over most of that period. The big dislocations you cite obscure the fact that demand rose for most of the period, demand was rising. So another way to read the chart is that demand-weighted prices declined most of the time, with occasional spikes. Either way, you can see in the charts the increased supply effect of e.g. fracking being deployed widely in the price response. One could also look back to 2008 to see the impact of increased supply on pricing of e.g. real estate.

rlanday 6y ago
2008 was, again, a demand crash: a lot of people could no longer afford to pay their mortgages and speculators stopped buying properties under the assumption that they would be guaranteed to be able to resell them at a profit after a relatively short period of time.