Criticality Characteristicsof Current Oil Price Dynamics

S. Drożdż a,b, J. Kwapień a and P. Oświęcimka a a Institute of Nuclear Physics, Polish Academy of Sciences, Radzikowskiego 152, PL-31-342 Kraków, Poland b Institute of Physics, University of Rzeszów, PL-35-310 Rzeszów, Poland

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Received: 25 08 2008;

Methodology that recently leads us to predict to an amazing accuracy the date (July 11, 2008) of reverse of the oil price up trend is briefly summarized and some further aspects of the related oil price dynamics elaborated. This methodology is based on the concept of discrete scale invariance whose finance-prediction-oriented variant involves such elements as log-periodic self-similarity, the universal preferred scaling factor λ≈2, and allows a phenomenon of the "super-bubble". From this perspective the present (as of August 22, 2008) violent - but still log-periodically decelerating - decrease of the oil prices is associated with the decay of such a "super-bubble" that has started developing about one year ago on top of the longer-term oil price increasing phase (normal bubble) whose ultimate termination is evaluated to occur in around mid 2010.

DOI: 10.12693/APhysPolA.114.699 PACS numbers: 05.45.Pq, 52.35.Mw, 47.20.Ky