Seems to me that oil prices are based on futures. As long as Obama is President the future is bleak and the price will remain high...regardless of supply! If it looks like Obama is losing the prices will drop like a stone...and then level because biz and demand will pick up if it looks like he is losing! Right now oil speculators are betting he will win!
>Seems to me that oil prices are based on futures.
I slightly disagree. Oil prices are based on a three sided model. The base of the triangle is the supply allotment. This OPEC determined amount is the largest factor. OPEC limits supply to maximize price.
Second, the price is determined by demand. If OPEC misreads the demand by too much then the price goes up, too little then the price goes down.
Third, the price is determined by the value of the dollar. We are in a currency world war, each side is devaluing their currency to re-float their banks debt. Banks are stuck holding assets that are worth far less than book value. A steady rate of inflation will eventually put them back in the black,
Futures come into play as compensatory bets on these three variables.