On Wed, 24 Sep 2008 09:43:56 -0500, Ken Fortenberry
wrote:

wrote:
...
Does anyone - I mean _ANYONE_ - now actually think that supply and
demand is responsible for oil prices? ...

Yeah, of course they do. George Soros believes there are four major
factors at play and two of them are fundamental and related to supply
and demand.

http://www.nybooks.com/articles/21792

Some of what he says makes sense, but some does not and/or his
interpretation of the issues is wrong and/or, put bluntly, he's lying. I
suspect the latter, but ??? During the run-up in oil from 20USD BBL to
150ish BBL, supply basically met demand. But the most important aspect
is that with the commoditization of oil (a relatively recent thing -
NYMEX in 1983), true supply and demand is almost factored out and the
protections afforded to both producers and buyers/users in a
"traditional" futures market are subject to exactly what they have been
subjected - high-risk speculation. On top of that, it allows a small
segment of the market, which in many cases has no interest whatsoever in
the actual underlying commodity, to set the market price. And on top of
all that, the actual price paid by the consumers/delivery acceptors of
the crude (refiners, governments, etc.) isn't necessarily the "market
price" because of several factors, including Saudi Aramco pricing.

http://www.gulfnews.com/Business/Oil.../10226899.html

IAC, I'd be VERY careful taking anything Soros says publicly as what he
actually thinks, because Soros is clearly in it for Soros and using
Soros to defend or deflect criticism of speculators is sorta like using
Bill Gates to defend Microsoft...

HTH,
R