Friday, January 09, 2009

Peak Oil Interest and the Price of Gasoline: Evidence from 2008's Wild Ride

Permit me to display some data. In graph #1, I reproduce a graph of monthly gasoline prices in the year 2008. Note that it peaks in July 2008. In graph #2, I present the prominent blog "Oil Drum" and its monthly visitor count during the same months of 2008. Do you see a relationship?

Next, here is the Oil Drum website's monthly count of visitors. Clearly, September 2008 is an outlier but throwing that out they appear to move in lock step.

What is interesting here is the clear causality. I don't believe that the OIL Drum blog causes gas price dynamics. The causality runs from oil price dynamics causing interest or declines in interest in the Oil Drum blog. When oil prices are peaking, the OIL Drum is hot hot hot.

Is this a general point? It what other cases do market price fundamentals drive Internet interest?