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0 pointsvbezhenar5y ago0 comments

I don't think it's about demand. If oil price were regulated as a honest market, it would cost much lower. Oil price is regulated by OPEC cartel. They could make it $200 if they want. I think that they're manipulating price low enough to slow development of non-oil energetics as much as possible and high enough to stay profitable. Also they're interested to put a pressure on Russia and some other countries, because Russia spends much more to get oil from the earth, so their margins are much tighter.

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lostmsu5y ago

No, they most likely can't really make it $200 for any significant amount of time. As everyone else at the moment they have to navigate the market, that now has more producers.

xoa5y ago

>If oil price were regulated as a honest market, it would cost much lower.

No, if oil was regulated as an honest market, it'd have the CO2 externality priced in to make it carbon neutral. That'd make the price significantly higher.

ogre_codes5y ago

> Oil price is regulated by OPEC cartel. They could make it $200 if they want.

This is why oil prices have been high since the late 70s. Shale oil and oil sands have put a big damper on the OPEC's ability to set prices. The only control OPEC has on oil prices is by limiting supply. Limiting supply to control prices only works when you can reap the rewards. If OPEC drops prices and US shale oil companies turn up the volume, then OPEC only gets the downside of limiting supply while shale oil gets the profits.

rconti5y ago

OPEC just doesn't have enough pricing power anymore.

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