It’s getting harder for members of the peak oil doomsday cult to keep the faith – oil futures fell under US$59 a barrel overnight while natural gas prices in the UK turned negative, ie gas traders will pay you to take the stuff away.

Marketwatch.com summarises the oil price:

Crude-oil futures fell almost 4% (to close at $US58.68 a barrel), pulling the benchmark contract to its lowest level in more than a year, with pressure coming from swelling US inventories, a lack of risks to output and doubts that key oil producers will take formal action to reduce supplies and stem the drop in prices.

The market has “high inventories, high levels of exploration activity, no supply shortage, low consumption at this time of the year and no Gulf [of Mexico] hurricanes — with lower chances of having one,” said James Williams, an economist at WTRG Economics. “The combination of these factors is consistent with prices below $50 per barrel.”

More shocking to the end-of-civilisation-as-we-know-it mob must be the glut of natural gas in the UK. A new pipeline from Norway is delivering into a market whose storage facilities are 96% full. Reports the BBC:

After trading at an average of 26p a therm through September, the spot price for gas delivered immediately fell to -5p during the course of the day, meaning traders are paying to get rid of it.

Major UK energy companies may be unable to take advantage of the free gas because of the lack of available storage and the fact that they have “hedged” supplies — protecting themselves against the risk of high gas prices over the winter by buying it in advance at a lower price.

Prices will rise in the northern winter as the new pipeline won’t always be running at capacity and demand increases as the temperature falls. It nonetheless remains a reality check after the many scary headlines the world has been subjected to during the oil bubble.

A broader cheap oil perspective is on offer in Newsweek with a claim that Chinese demand has been overstated, but the peak oil cult members won’t be easily converted.

Oil prices will continue to bounce around with whatever supply shocks come along and petrol won’t be as cheap as we were used to, but the doomsday scenario has never made sense – the market mechanism and our incredible adaptive abilities are forever underestimated. Just watch us.