Saturday, December 6, 2008

Riddle of the oil price resolved

Astrology can give us insights into mundane affairs if we know how to use it properly - by understanding the fundamentals. In this article, it is shown how the placement of Saturn by sign (in the sidereal zodiac) is closely correlated with changes in the price of oil.

In this article, we focus on the fundamentals, namely the comparison of the real price of oil with the transit of Saturn through the signs. We have monthly data for the real oil price (the nominal oil price adjusted for changes in the US consumer price index-all items) from 1946 to late 2008. When we examine this data in terms of proportional representation (log form) we note that the oil price has tended to jump around quite a bit. At the same time, there are periods when it is low and high.

The indications of Saturn
Saturn rules the economy, working people and things mined from the ground, including oil. It therefore represents those things which indicate the demand for oil. By comparison the planet Mars represents industrial production, including refineries. Mercury represents commerce, exchange and distribution. Venus represents knowledge of chemicals. Ketu rules combustible compounds like petrol. Rahu rules smoke and toxic substances. An analysis of the transit of all these planets and their interaction via aspects is required to accurately predict the spot price of oil on a daily basis. As there is limited time for that, the focus is on the salient trends based on the key indications of the transit strength of Saturn.
Saturn in Leo
When Saturn is strong and unafflicted in the royal sign of Leo, the conditions in the economy, including the employment and wages of the working people, tend to be better. The ability to purchase and operate vehicles would be greater at such times. During the present decade, we have seen how growth in the global economy, notably with fast growth in the Emerging Market Economies of China, India, Brazil and Russia has adde to the demand for commodities, including oil. With demand exceeding supply, the oil price has been bid up. More recently, the US-led financial crisis has spread around the world affecting economic growth and employment conditions everywhere. As a result, the excess demand for oil is in retreat and a situation of excess supply may be in the offing. By early December 2008, the oil price has dropped sharply from the peak levels seen in July 2008. To react to this, the cartel of oil producing countries, OPEC, appears to be set to decide shortly to limit oil production going forward. This is likely to have the effect to reduce the excess supply of oil and thereby underpin the oil price at a level above the historical average. However, the historical trends are clear, as Saturn moves out of Leo in September 2009 and until it enters Aries in June 2027, the oil price would be expected to enter into a trend decline.

Saturn in Aries
By contrast, when Saturn is in Aries, its sign of debilitation, it is considered weak. Its indications, the economy and conditions of working people, then tend to be weaker. This is more pronounced if Saturn is also afflicted in transit. This was the case in the period from May 1998 to January 1999. While Saturn was transiting the sign Aries it received a close afflicting aspect from malefic Rahu in the sign of Leo. In late 1998, the price of oil reached a trough of $10 per barrel. Once the aspect lifted in 1999, the oil price began a convincing recovery. A similar, but less pronounced decline, was seen in the prior passage of Saturn through Aries from June 1968 until April 1971.

In the next graph we see how the oil price tends to reflect the passage of Saturn into signs. In Aries, Saturn becomes debilitated and hence quite weak. It is in this sign that that the oil price tends to be quite low. By comparison, when Saturn enters the royal sign of Leo, the oil price tends to be at a high level. This is consistent with the fundamentals of Systems' Approach to Mundane Vedic Astrology.

By focusing on the fundamentals of astrological placements it is possible to see basic trends of important mundane phenomena.

No comments: