polishlogician

60 Minutes on Oil: Did Anyone Verify Anything?

I agree that supply and demand isn't the whole picture, but "expectations" caused a perception of this dire lack of supply? Has the Mid-East marketedly improved so much over the past...what...5 months? Otherwise, were there supply problems in Norway, England, Mexico, the Gulf, Alaska, or even Venezuela that I'm simply not aware of? To me, it seems excessive reliance upon the "perceived expectation of possible demand shortage" is outweighed by own ignorance, as I didn't understand it then, and I don't today, I guess they were just wrong with their perceptions? Gosh, I hope they didn't lose any money being so unbelievably wrong.


On Jan 12 08:51 AM huangjin wrote:

> Markets work on expectations, not the current supply and demand.
> People believed supply would not meet demand, and the price reflected
> their beliefs. This is why current supply and demand is not always
> the whole picture. Was oil at $147 ridiculous, and a bubble? Sure.
> But speculators cannot control reality, and they lost billions with
> their bets. And the reason oil fell so far is because the economy
> has imploded. Oil speculators lost because they pushed prices too
> far, and they failed to consider a massive drop in demand.
>
>

Iraq Production, Conservation Could Keep Oil Price in Check for Years

I think oil supply problems are exaggerated for speculative profit, I believe that Big Oil purposely capped Iraq at 1.5MM/bbl in line with OPEC quotas and on par with Iran's quotas, as well. We won't see increased production (6MM) nor any need for increased production, the price of crude may rise dramatically, but it won't be for lack of supply.