Originally Posted by
OpieTaylor
You’re probably just looking at refineries with supply chain problems paying that much.
The index’s set prices to match demand. Demand has already gone down, no possible way demand is same at $95 at it was at $60 when this started.
Everyone keeps quoting demand at $60 then calculating how much demand is being chocked off in the straight. When it went to $90+ demand fell off.
Asia and Europe will have supply chain issues and shocking figures will come out to scare everyone.
We all survived the great toilet paper shortage, I am sure there is an invoice somewhere of a shocking price on toilet paper for aircraft.
If the index’s go to $150 the world won’t need the straight because demand would go down.
It’s not just demand destruction that attenuates price increases, it’s also that supply has elasticity as well. Older fields that are economically marginal and potential new drilling that are uneconomical to develop at $60 a barrel can be fracked and production expanded at $90 a barrel. The higher the price, the faster the production can be increased.