Engineer

Global Financial Crisis Makes Oil a Great Hedge

It seems like there's always something missing in these analyses: there is a price point at which the producers will simply stop producing.

Why on earth would I produce oil if I'm losing money on each barrel? I'm going to shut in my wells and tell everyone to go home.

Oil is NOT getting cheaper to produce. It is getting more and more expensive to produce. The world is still dependent on it for virtually all of its transportation needs. Go short if you must, but only on a short term basis, please.