Finally, after a four-month stretch in which oil prices rose from under $70 to over $95, oil industry analysts seem to have caught on that prices are rising. From Bloomberg news (emphasis added):

Twenty-one of 35 analysts surveyed, or 60 percent, said oil prices will rise through Nov. 9 … Respondents [had] predicted price drops in the previous 16 weeks.

That’s right, for each of the preceding 16 weeks, the consensus of oil industry experts was that prices would fall in the coming week. They were right five times, wrong 11 times — and crude prices rose by over a third during the stretch. So much for expertise.

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Over the longer term, the oil industry analysts haven’t fared much better:

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The oil survey has correctly predicted the direction of futures 52 percent of the time since the survey’s introduction in 2004.

Statistically, that’s barely better than a coin flip. And, as it turns out, it’s considerably worse than if the analysts had mailed it in and simply guessed that prices would rise each week.

So what’s behind this dismal record, from people who allegedly know the oil industry? Wishful thinking? Incompetence? Market manipulation? Probably none of the above. As we’ve noted before, the futures markets don’t always do a great job of predicting energy prices either. And arguably, futures markets are the very best methods we have of predicting prices, since they aggregate the guesses of thousands of well-informed people with a financial stake in getting the answers right.

No real point here — except that when it comes to energy costs, it no longer makes much sense (if it ever did) to rely on expertise, or experience, or even the collective wisdom of the masses. Oil prices are seemingly charting their own direction. Recently, despite the opinions of the allegedly well-informed, that direction has been up.

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