Thursday, February 23, 2012

Chart of the Day: Which of these would you rather be heating your house with?

Put another way, if you think Iran doesn't matter to you, think again!

Iran is someone else's problem right? Most definitely wrong!

In addition to the global risk that a nuclear Iran would pose, its current saber rattling is having more of an immediate and extremely negative impact on the price of crude oil.

Do you remember an old ad that tried to entice people to switch from oil heat to gas heat? At the time, on a relative basis, the prices of the two tended to track each other making the expense of conversion seem like a non-starter.

Now, judging by the charts below, converting wouldn't have been such a bad idea. On the five-year chart the price divergence between the two fuels began in earnest in the beginning of 2009.

"Oil heat's a dinosaur!"

You can say that again. These two charts tell the whole story (click to enlarge).

A one-year chart of crude oil versus natural gas prices

A five-year chart of crude oil versus natural gas prices

Chart source

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