Michael Giberson … or a clumsy cartel causing excessive volatility in world oil prices, or maybe none of the above. Earlier this week the Cato Institute hosted a discussion of a recent report by Andrew Morriss and Roger Meiners, “Competition in World Oil Markets: A Meta-Analysis and Review.” Panelists included Morriss, FedEx chairman Frederick Smith, and … More OPEC: Threat or Menace…?
Lynne Kiesling Just a quick note to accompany the discussion in the comments on Mike’s post about Southwest Airlines, Delta Airlines, and fuel price hedging: a couple of weeks ago Virginia Postrel had a very good analysis of the reasons why the Delta-Conoco transaction is not a good idea, in her regular column at Bloomberg … More Virginia Postrel on Delta’s Refinery Purchase
Michael Giberson SMBC on the president and the economy: [HT to Rick Weber for the heads up.]
Michael Giberson Steve Mufson at the Washington Post reports: President Obama proposed measures Tuesday to step up oversight of energy markets and boost by tenfold the penalties for market manipulation, in an effort to blunt political pressure over the 20 percent increase in gasoline prices since the beginning of the year. [Links in source.] Not that the administration has … More Oil Speculator Witch Hunt, 2012 Edition
Michael Giberson Saudi oil minister Ali al-Naimi said there was “no rational reason” for current high oil prices, since there were enough supplies and all consumers were getting oil. James Hamilton rises to object, “if oil prices were lower, the world would want to consume more than is currently being produced.” Hamilton examines what the quantity … More Hamilton on the Main Reason Oil Prices Are High
Michael Giberson The story in yesterday’s Wall Street Journal on the link between gasoline prices and crude oil prices was a bit frustrating. The article does a reasonable job explaining key pieces of the puzzle, but then fails to assemble the puzzle into something resembling reality. The story is headlined, “Gas Stays High as Oil … More The Wsj’s Confused Story on Gasoline Prices and Crude Oil Prices
Lynne Kiesling Following up on Mike’s post yesterday about pandering politicians and their 2011 edition of the recurring petroleum price witch hunt … Others have weighed in on the idiocy of this “Oil and Gas Price Fraud Working Group”. Let’s start with KP’s go-to energy finance economist, Craig Pirrong: … it’s an opportunistic effort to … More Oil Speculator Witch Hunt, 2011 Edition
Michael Giberson In the physical world, spikes and bubbles are quite different things that don’t generally get mistaken for one another. Curiously, in economic metaphor, the same phenomena can be called a spike and a bubble. Argument among economists continues on the issue of whether the oil price spike in 2008 was or wasn’t a … More Crude Oil Prices in 2008: Was the Spike a Bubble?
Lynne Kiesling From a good article in today’s New York Times: 2009 is turning out to be a bumper year for new oil discoveries; new oil discoveries always occur, but this year has been unusually fruitful. This quote from the article illustrates the important dynamic intertemporal incentives that price signals provide: These discoveries, spanning five … More Price Signals and Free Markets Lead to Oil Exploration: Who’d a Thunk It?
Michael Giberson The New York Times observes that crude oil price volatility has been exceptionally high for the last eighteen months. (Hmmm. Eighteen months ago … January 2008 … the Iowa caucuses … the U.S. presidential primary season gets underway in earnest … nahhh, couldn’t be all due to presidential politics.) Actually, eyeballing the chart … More Crude Oil Price Volatility