I could vote for Donald Trump

[Centrehalf]

I doubt either of us believed the other would change his mind as a result of this exchange but there is a chance that our discussion has made an impact on others.

It has made an impact with me. I only took 3 Econ classes in college so I know the basics but lately oil pricing has confused me a wee bit. I went online to find out a little more about this subject, because of the debate you two are having, and I found an interesting site. It's a blog, so I'm not claiming it's authoritative, but he claims that speculation is actually part of the formula used to calculate current day prices.

http://peakoildebunked.blogspot.com/2008/07/366-futures-prices-determine-physical.html

Like I said, I'm not vouching for accuracy here, but if this is true then the Supply/Demand discussion you two were having was the wrong discussion to be having. I'll leave it up to others to poke holes in what's presented in the blog post, but it does explain alot if it's true.

 

[BigRob]

We have both made our case and there's no reason to continue if we're just going to start again from the beginning. I doubt either of us believed the other would change his mind as a result of this exchange but there is a chance that our discussion has made an impact on others.

Fair enough...I always enjoy a back and forth with you.

Centrehalf, I will read your link tomorrow, I am about to sign on for tonight.

 

[GenSeneca]

It has made an impact with me.

Glad to hear it, hopefully there are others as well.

Like I said, I'm not vouching for accuracy here, but if this is true then the Supply/Demand discussion you two were having was the wrong discussion to be having.

The author points out that speculation in oil futures sets the price of crude:

Futures aren't a paper bet on the direction of prices determined by some independent process. Futures themselves *determine* the price of most physical oil traded today.​

Both BigRob and I understand the affect speculation has on the price of oil. My complaints about speculation are based on the fact that oil prices are set by speculation rather than actual supply and demand. BigRob was trying to argue that speculation is part of the supply and demand dynamic. That's why it became a discussion about defining and explaining the function of supply and demand.

If you believe we have missed something, I'm sure I speak for both of us when I say we'd be glad to hear it.