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James Hamilton looks at why oil and gas prices are rising even as production climbs: "It makes...

James Hamilton looks at why oil and gas prices are rising even as production climbs: "It makes no economic sense to add gallons of ethane or propane to gallons of crude oil to try to summarize global oil supply. But growth of natural gas liquids has been a key factor in the reported increases in world oil supply... But if you’re waiting for it to lower the price you pay for gasoline at the pump, you may have to wait a while longer.”
Comments (4)
  • It's rising because of QE and money printing.
    11 Feb 2013, 06:00 PM Reply Like
  • More like: its rising because of investors who fear QE keep buying more and more products like (USO) permanently removing more and more of the worlds supply from the market.

     

    Anyway, I really enjoyed the linked article. I find the the point being made, that some measure of global production being counted as 'energy' is not really so, compelling.

     

    If, as the author proposes, production is not increasing at anywhere near the rate officially 'counted', it definitely makes for a good reason as to why prices aren't falling.

     

    On the other hand, most indicators seem to suggest actually crude supply and demand to be in equilibrium, if not tilted to the supply side, so...
    11 Feb 2013, 06:15 PM Reply Like
  • Global demand.
    11 Feb 2013, 06:07 PM Reply Like
  • Global demand is so strong that Saudi Arabia has cut production to keep prices up. ?
    11 Feb 2013, 10:09 PM Reply Like
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