JREwing

Record High Crude: Free Markets Meet the Cartel

Vikram:

You mean the CNBC guys who ask every day: What is the 'real' price of oil?

Is this financial television or the communist party network.

The real price for WTI is the latest tick for the front month at the NYMEX.

Of course distillates went up the last five weeks. The summer is coming. You only need heating oil for a warm shower. But during the summer, refiners produce mostly gasoline and THEN have to scramble to produce enough heating oil for the winter.

I know, that airlines are one step away from being broke. Nevertheless, they never transported more passengers than 2007. They may be in ruinous competition, but the do a lot business.

There is nothing wrong with being a US citizen.

So let's say, oil sells off to 110$ and you open up the SPR and oil goes down to a 100$. Now that's a very strong often tested support. You have fill the SPR up again, don't you. Traders know that too.
It just wouldn't work.

So you want to drive away speculators. What's next? You're gonna ban short selling, because speculators push down a stock you hold.

What is it with Anti-Free-Market- Guys? As soon as things do not play out the way you thought, you want to change the rules, because you don't like them anymore.

Keeping oil artificially cheap will worsen an already dangerous situation.

Oil has a right to be expensive. It is the greatest natural resource in history. Without it, we are back in the dark ages. And it gets harder and harder to find.

When I listen to oil bears like you, one would think the world is running out of tank farms.

Do you really think, that oil companies around the world spent billions and billions of dollars on new exploration and production and on the enhancement of existing assets, if the supply and demand picture wasn't justifying those huge investments.(Check the revenues of oil service companies and drillers. Where do you think that money comes from?)

If the price of oil would be high just for the fun of it, oil companies would just take the money and don't invest anything. That is obviously not so.

Even if you succeed in cutting the speculation out of the market, the oil companies wouldn't sell for less, or they simply cut back their E&P and prices in the future are going to be that much higher, because the demand that wasn't destroyed by your artificially low prices cannot be justified anymore.

Oil companies need that oil price, or production declines.