Are you interested in understanding how oil prices could be lowered at the present time?

Question

Then read this:

http://online.wsj.com/article/SB121486800837317581.html

Now, I realize the facts in this article will go right over the heads of many of you but if you are interested in understanding the circumstances under which oil prices could be lowered you may wish to make the effort to get what the author is saying.

BTW, Feldstein has credentials that few in this country possess so feel free to accept what he's saying at face value. In contrast, most commentators have only the fuzziest grip on economic reality and are merely repeating statements they've heard or read elsewhere or their ideas are half-baked nonsense. As I said: most commentators, not all. Feldstein is one who has shown repeatedly that he understands how economies and economic actors behave and why they behave the way they do. As should be obvious from a careful reading of this article.

Thoughts?

Answer 1

Good article.

Here is another that is over a year old and in which OPEC threatens raising oil prices

http://www2.irna.ir/en/news/view/menu-23...

Answer 2

Regardless of the author's initial denial, this amounts to saying price will respond dramatically to mere news because the market is driven by speculators.

Congress has already passed a law to regulate the dark speculation markets, over Bush's veto.  Maybe you should be curious as to whether Bush intends to enforce that law.

In any case, a lot of US demand is due to people commuting twenty or eighty miles a day in oversized gas guzzlers.  

You are suggesting we should accelerate depleting what remains of our domestic reserves, to enable short term consumption, for the sake of frivolous luxury.

But demand is subject to no curbs.  The people will burn as much oil as they're allowed to.  In fact they're encouraged to do so, as that is what supports the high price the oil companies want.  The high price they fully expect to get for every barrel of our remaining reserves they pump out of the ground.

We would end upcompletely dependent on foreign oil, with no domestic reserves to fall back on.

Our domestic reserves need to be recognized for the strategic national asset that they are.  

We need to conserve them, because we may someday have a more important use for them than carting your butt to burger king.  Defending the country for example.

Electric cars can be built now, capable of serving the needs of many commuters.  The automakers should be compelled to make them.  Those whose needs do not exceed the capabilities of such cars should be compelled to buy them, when replacing their old cars.

Nuclear reactors can provide all the power needed to drive them.  We already have grid for distribution.

It is ultimately a matter of national defense. The desires of big business to make short term profits notwithstanding.

Answer 3

99 percent of that is discussing the problem...

with only the very end having vague solutions, in which he doesn't both to discuss how much it could or could not affect the price of oil...

my thoughts are... he barely grazes the issue of solutions only to say that he thinks there are a couple...