Well something better bring it down or we will all be talking conspiracy. I do not see any solid reason why oil is as high as it is.
Crude stockpile was 370.3 million last week. In English, we are up to our eyeballs in the stuff. Pretty much the same with gasoline. The baloney scare stories about "tension in the Middle East driving up prices" are still being pushed on Bloomberg but the shiny is really wearing off on that. They primarily are come-ons for the traders to lure in suckers with lines about $140 to $200 bbl oil.
There is a need to get the gas sales going as refineries are running at about 81% (very low) and the crude will pile up even more. To understand this visualize a car going 48 mph on a 60 mph road. There you go.
The common mantra is oil is a global commodity. Well if we are so full of the stuff that there is no more space to put it, so is everyone else. Global commodity ya know. Just to be sure, I checked. Globally OEDC total oil stocks are climbing and are above levels from this time last year. That includes "floating."
Second mantra... falling dollar? Did the dollar gain 66 percent in 2008 over a period of just five months? Nope. Has the dollar dropped 2/3 of it's value from 2008 till today? Nope.
Other IBD/TIPP poll findings:
• 58% are driving less.
• 40% may cancel or shorten summer vacations.
• 27% are considering or have considered trading in for a more fuel-efficient car.
U.S. demand has and is continuing to go down, steadily and the price is going up?
Sorry, I just do not see normal supply and demand here.
Of course, we all know a globally overstocked commodity does in fact go up in price, not down, right?
On a happy note, it's gonna make it tough for the communists selling the "we need alternative energy" when there is so much crude in the supply chain the tankers start getting parked offshore again.
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Bookmark you post. You have pretty much nailed it and are calling it for what it is. Clarity.
Good points...
How do I nominate you for “Post of the Day”??
Source for this claim?
The World Oil Market is also, only a part of it. The biggest problem is the cost to refine and produce distilled products.
There are so many “special blends” and EPA regulations/compliance required by Congress, the EPA and the DOT that it has raised the product cost higher than it was several years ago. And it will continue to climb, in relation to the cost of a barrel of oil, or the supply/demand factor.
Refineries have their collective hands tied with all these new EPA regulations and Environmental Protection compliance measures that are way beyond reasonable overkill.
A well in North Dakota that we could drill for 1 Million Dollars 3 years ago, now costs over 5 Million today. All due to extreme EPA regulations, closed drilling systems, and HAZMAT disposal requirements that were not there when Bush was still in office.