Thanks for the apolitical response, then. Anyway, your drivel did nothing for the discussion. Speculators supposedly lie and talk up the price of oil, but they don't talk it down? As if no one profits on the short side. And as if you can prove such an assertion. At least you proved my point, though.
I added XOM's all-in costs per barrel, Tillotson's comments and the Gasoline crack. You "added" working Eric Holder into it- you get a "95" score at Fox since you forgot Benghazi. The biggest lie by speculators has been the overstatement of production costs. Some trailer-trash have even claimed $100/barrel in Saudi Arabia. There has also been a lie that global demand is not price-sensitive (it is), and a lie that high oil prices do not impair economic growth to any meaningful extent (they do). And, a "curious bedfellow" situation. Most far-left environmentalists (of which I am) want oil prices to go up, not down, as do many far right FoxNews-watching Klansmen-wannabes. This strange dynamic is very important in Washington, D.C.
Another ET thread gone to shit. I can't believe politics has to contaminate every ET thread. Oil is very over priced even at these levels. In a competitive market, which oil is now in, oil should trade at marginal cost. That's between $30 and $45 a barrel. It has a long way to fall. The flip side to the marginal cost argument is that oil is not only priced based on it's fundamental value but it's value as an asset. Oil is used as a store of value. And because of that, one has to figure what the opportunity costs are for storing oil relative to the next best alternative. Somewhere in between there is your market price.
The price of oil as been fairly stable for the last years, no? Has it been over priced for this whole period or has something changed?
A lot has changed. The US Dollar has rallied the hardest since the 1960's. Coincidentally, that was when OPEC formed. The Saudi's are no longer the marginal supplier. The US Gulf is now. Also, the cost to produce a barrel of oil has dropped substantially the last few years.
Funny I just got gas today and prices haven't dropped even 5 cents ...some stations outside my area have lowered prices only by 5-10 cents. Funny if prices jumped 10% I would have paid 25 cents more this past week, got to love greed...
The dollar is going through a major breakout that could last for years. This means just on the Dollar alone Oil could get cut in half again from these levels. Shale is more expensive but there is so much heavy crude in South America and Mexico trading at $20 discounts to WTI to meet demand. At some point you exhaust the cheap supply and all that is left is the expensive stuff and then you will see your costs go up. That's actually what Andrew Hall of Phibro fame is betting on far out on the curve in 2018 and 2019 although he took a lot of exposure off recently, or so he says.