Ron2008

OPEC Will Assure Oil Prices Stay in a Reasonable Range

I have to disagree that OPEC is maintaining prices here.

US inventories have dropped because it is a normal business practice to limit purchases and work down inventories to minimum levels when the price of its' raw product increase dramatically in price. They then buy their raw product hand to mouth.

Also the crude futures market went into backwardation last July. Further reducing any incentive to keep excess crude inventory.

There is no shortage of supply on the market right now. Just a lack of buyers.

If OPEC removed all quotas tomorrow and the price stayed at $100, US inventories of crude oil would not increase at all.

Only the US government maintains/builds inventories at record high prices.

Numerous commodities are at record highs because of increased specualtor investment. OPEC is just along for the ride.

I also disagree that $90 oil is not hurting the economy. But I won't get into that right now.