Friday, May 13, 2011
Exxon CEO Admits that Oil Should Be $60-70 Dollars a Barrel Based on Supply and Demand
Under probing questioning by Senator Cantwell, Exxon Mobil CEO Rex W. Tillerson admitted that oil should be $60-70 dollars a barrel based on supply and demand:
Some of the increase in price above this "supply and demand" level price is due to companies using futures contracts to lock in oil prices to ensure certainty (which is a valid business purpose).
Some of it is due to speculation. Indeed, using high frequency trading, it is relatively easy to manipulate the price of oil.
1 comment:
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The price of oil is more about perception than reality.
ReplyDeleteThe American consumer should not be a pawn in the unethical games played by those striving to profit in the highly speculative futures market, especially when it involves a commodity which has such a major impact on the overall economy as is the case with the wildly fluctuating price of crude oil.