Its nice to see thats the chaps at Forbes are up to speed with basic economics, not like commentators elsewhere.
- Compare the wisdom of:
So how do oil traders’ supposedly pull off this feat of keeping oil prices elevated above the market clearing price? Well, there is only one way: Excess supply created by the artificially high price has to be stored, either in tanks or in the ground.
- With the ignorance of:
Moammar Quadafi, violence in other MENA countries, and the metrics of supply and demand have all exerted a limited impact on oil prices these days. The much greater driver has been money flow and the velocity with which money has cascaded (largely unfettered) into most commodities, and particularly into WTI and Brent crude oil futures.
A civil war which reduces global demand for oil has less impact that trading in derivatives that does not impact on physical deliveries of crude. Doesn't make sense does it.
Update:
A Nobel Laureate agrees with me
