Still Laughing

So You Think Oil’s Expensive Now?

KoS - you know while you're right and maybe the best thing would be to just let the speculators drive it up and eat the loss, I'm still trying to grasp the half-assed economic logic of the "low supply" argument.

So many people are trying to say that it's high because supply is dwindling, but these are futures that are being traded and not gas which means they expect the price to continue to increase. However, how can the price continue to increase when it is heading past the point of being more expensive than a substitute energy and the research cost to develop it. It's like half of Wall Street was only paying attention in economics class to a basic supply and demand curve and missed the opportunity cost and substitute good lectures. The tragedy is that unlike other "bubbles", energy behaves like a tax and and the true cost of speculation isn't the gas high price but the slowing overall slowing of global GDP.