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Politics : Politics of Energy -- Ignore unavailable to you. Want to Upgrade?

To: Thomas A Watson who wrote (1872)	8/21/2008 1:39:41 PM
From: TimF	Respond to of 86356

Why do you put in quotes "inflating the price". I in no way spoke of inflating the price. In this context "inflating the price" could be read as selling for a price that isn't "the true price" or is somehow a clearly "unfair price". You quoted (and apparently supported) $50/barrel as the true price. If that's the true price than the current price would be "inflated" in this sense. I don't consider it inflated, because I think there is no true price other than what the market will pay for it. Quotes wasn't meant to imply you used the term if I was trying to convey that I would have either made a full direct quote (probably italicized) or said something along the lines of "not 'xxxx' as you say". In other words I would make it explicit not implied. The quotes represent the fact that the price is not actually inflated in this way, in any meaningful sense. If it was a real factor, there would have been no quotes. FUD as a factor in driving the price the market will bear does rise as the supply and demand approaches balance. To the extent there is any "true price" that price includes ideas about future changes in supply and demand. To the extent that the ideas are driven by FUD that doesn't make the price any less "true". The exec from exon said he believed costs plus a specific margin that is deemed fair was 50 bucks a barrel. Margin for who? For Exxon-Mobil? They produce oil, but they also buy oil on the world market. If their price to other refiners (if they resell it), or price for refined products from their own refineries (if they don't) was based on $50/bbl oil, than their margin would be negative. In any case "margin that is deemed fair", is subjective, and not something to reasonably base ideas of "true price" off of. Prices are not based on costs of production + a margin (fair or not), but rather what people will pay for a product. If oil cost nothing to produce, that wouldn't make $0, or even $50 the "true price".