EclectEcon

I just read Phil Miller's brief posting and graph, showing that US energy expenditures, as a percentage of total US consumption expenditures, while rising recently are well below historical highs and, this ratio is roughly in the same neighbourhood it has been in much of the time over the past fifty years. Instapundit has more on this relationship. However, be careful when you look at the chart he references. Things don't seem as rosy to me as they do to Insta.

Phil's piece prompted me to visit EconBrowser, where there have been two excellent pieces in the past couple of days. The first one asks "Who's Afraid of $3 gasoline?" and has a pretty pessimistic outlook for the US (and world?) economy.

The second addresses the role that speculation might or might not have in driving up the world price of oil. The conclusion is that speculators most likely are driving up the short-term futures prices because of concerns about fundamentals, namely a risk of disruption in supplies. A comment to that piece links to this graph of short- and long-term oil futures prices (it is a thumbnail; to see it more clearly, click on it):



What is going on here? I realize it isn't much in dollars, but why do longer term oil futures prices drop off like that?