Originally Posted by
vaksedtothemax
Better alert the media they are reporting the wrong prices, they could be alarming people way better…..what you are saying is we only use the standard price metric when you think it’s heading for the moon, but when that narrative doesn’t pan out in your favor we use some phantom metric to judge prices and then can make up any price we decide it’s trading at… got it
Hell, it’s at $250 a barrel … man that’s easy.. I like your rationale, easy to win debates that way.
You really need to educate yourself on how petroleum products are actually priced, traded, sold, and delivered. Like you, I used to see the quoted bbl price of Brent and Texas crude as pretty accurate estimates of the actual cost of a delivered barrel of oil, and as a proxy for final refined fuel prices. That's because, in normal market conditions, that's generally been true. In these last few weeks I've kinda had a crash course in energy market economics, which has been pretty eye-opening for me.
The current disruption in the Strait has completely changed the equation and made the quoted barrel prices much less relevant. This isn't politics; it's just economic and mathematical reality. The implications of the strait remaining closed for any significant period of time, both for the global economy and especially our industry, are pretty dire.