dagblog - Comments for "Oil Prices Surge as Key U.S. Artery Opens"

There's a better explanation

Donal — Wed, 16 Nov 2011 19:52:58 +0000

There's a better explanation in the WSJ. Although oil was trumpeted as being fungible worldwide, a glut of crude arriving at the trading hub of Cushing OK has been pushing West Texas Intermediate prices lower than Brent. In 2006 they reversed a pipeline from sending Cushing crude to refineries to instead receive Syncrude from Canadian tar sands. That probably led to the glut. So in essence, this move just fixes that move.

It makes perfect sense,

Verified Atheist — Wed, 16 Nov 2011 19:35:16 +0000

In reply to Oil Prices Surge as Key U.S. Artery Opens

It makes perfect sense, decrease supply and prices go up. Increase supply, and prices go ... up. Wait, what? I get the bit about prices equalizing somewhat, but shouldn't the overall price (as if there were such a thing) go down? In reading the article somewhat, it seems that supply is actually going down (thus explaining the higher prices), but what does that have to do with the Seaway pipeline (which won't open until 2012)? I'm just not getting it.