Something Fun for the Peak Oil Crowd
I truly believe that major investment banks and a large number of very high-risk-taking financial players have seized control of the oil markets, especially in the last six months. During that time, oil prices moved in one direction and market fundamentals really moved sideways or even lowered. Demand has slowed down significantly. We have seen all kinds of indications that we are reaching a breaking point here. We’ve seen what happened to gasoline margins on the West Coast; they’ve dropped to an almost 18-year low. All this is an indication that something is wrong with the system, that supply and demand fundamentals do not justify the current price. But if the current price is based on speculation, there is no limit to how high oil prices can go. Basically, as long as there is somebody willing to bid higher, the price of the commodity will move higher. — Fadel Gheit, top Wall Street energy analyst, in a Foreign Policy interview
The true value of anything has always been what someone is willing to pay for it. Two chickens, a cow or $$. Oil is an incredibly dense energy source. One barrel can do the work of 10 men for a year..what’s the value of that. Even in China it takes more than 98.06 to pay and feed 10 men for a year. What is the value and what do the so called fundamentals have to do with anything. The cost of producing something has no relationship to price. I am thinking that if there was truly a robust supply of oil even the speculators couldn’t drive up the price —its pinched supply and big demand that allows that to happen.
— Terry · Nov 27, 11:56 PM · #