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

To: Hawkmoon who wrote (10707)	7/6/2009 4:01:51 PM
From: RetiredNow	1 Recommendation Read Replies (3) \| Respond to of 86355

I agree with you that we should not create laws that put friction into the oil market. However, I also think we should not be subsidizing the oil market, because they already have plenty of market incentive to drill. However, you are missing the point of roadwalker's argument. What if we drill the hell out of all our domestic oil supplies at today's prices, we'll be getting around a $65 per barrel (less costs) of economic benefit. Whereas, if our oil companies drilled but held the commodity off the market until scarcity drove up prices, they'd get a higher price per barrel on the open market or our economic would get a higher economic benefit. If the oil was limitless in the ground, then it would make sense to drill and pump continuously. But since there is a limited supply, there is a good argument for those oil companies to limit their own drilling or at least hold off on sales until prices rose dramatically due to scarcity. It's the same thing as when my son buys comic books to sell later on. They rise in price as old ones get thrown away and scarcity kicks in on a comic book that everyone wants. So he doesn't buy it and sell it a week later, rather, he holds it and makes 100% or more on his money by selling a few years later. US oil companies should be thinking the same way, without government mandates, of course.