{"id":33822,"date":"2018-04-27T16:27:21","date_gmt":"2018-04-27T21:27:21","guid":{"rendered":"http:\/\/olduvai.ca\/?p=33822"},"modified":"2018-04-27T16:27:21","modified_gmt":"2018-04-27T21:27:21","slug":"the-oil-curse-comes-to-washington","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=33822","title":{"rendered":"The Oil Curse Comes to Washington"},"content":{"rendered":"

The Oil Curse Comes to Washington<\/a><\/h3>\n
\n

\"\"<\/a>Prices rise and prices fall.\u00a0 So, too, they fall and rise.\u00a0 This is how the supply and demand sweet spot is continually discovered \u2013 and rediscovered.<\/p>\n

When supply exceeds demand for a good or service, prices fall.\u00a0 Conversely, when demand exceeds supply, prices rise.\u00a0 Producers use the information communicated by changing prices to make business decisions.\u00a0 High demand and rising prices inform them to increase output.\u00a0 Excess supply and falling prices inform them to taper back production.<\/p>\n

This, in basic terms, is how markets work to efficiently bring products and services to market.\u00a0 Five year plans, command and control pricing systems, and government price edicts cannot hold a candle to open market pricing.\u00a0 But not all markets are created equal.\u00a0 The market for gumballs or garbage bags, for instance, is much simpler than the market for solar panels or jet engines.<\/p>\n

What we mean is some markets are subject to more government intervention than others; especially, if there\u2019s a large money stream that can be extracted by government coercion.\u00a0 Sometimes governments nationalize an entire market \u2013 for the good of the people, of course.<\/span><\/p>\n

Strange and peculiar price movements can indicate there\u2019s something else besides natural supply and demand mechanics going on.\u00a0 On April 6, a barrel of West Texas Intermediate (WTI) grade crude oil cost about $62.\u00a0 Ten months ago, that same barrel of WTI oil cost about $43.\u00a0 About 24 months ago, it was only about $30 a barrel.<\/p>\n

Yesterday, April 26, WTI oil was about $68 a barrel.\u00a0 What\u2019s going on?<\/p>\n

Price Fixing Accidents<\/strong><\/p>\n

Indeed, the oil market is subject to mass government interventions the world over.\u00a0 The push and pull of these hindrances to regular market determined price discovery can prompt wild price distortions.\u00a0 We don\u2019t pretend to understand the many variables at play that influence the price of oil.\u00a0 Still, today, we scratch for clarity and edification, nonetheless.<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

The Oil Curse Comes to Washington Prices rise and prices fall.\u00a0 So, too, they fall and rise.\u00a0 This is how the supply and demand sweet spot is continually discovered \u2013 and rediscovered. When supply exceeds demand for a good or service, prices fall.\u00a0 Conversely, when demand exceeds supply, prices rise.\u00a0 Producers use the information communicated […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[2857,12043,11763,588,5197,2856,865],"class_list":["post-33822","post","type-post","status-publish","format-standard","hentry","category-economics","tag-demand","tag-economic-prism","tag-mn-gordon","tag-oil","tag-price-fixing","tag-supply","tag-washington"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/33822","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=33822"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/33822\/revisions"}],"predecessor-version":[{"id":33823,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/33822\/revisions\/33823"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=33822"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=33822"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=33822"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}