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NickB79

(19,063 posts)
6. Yes, speculation does play a role in global oil trading
Fri Dec 28, 2012, 08:11 PM
Dec 2012

But I was specifically addressing the cost to extract oil from these particular formations. At $70/barrel to produce and get to market, that leaves only $20-$30 worth of speculation to play into the price.

And regarding diesel, remember that it's also about scale of economy here. There is a much higher demand for gasoline vs. diesel, so refineries tweak the process as much as possible to get more gasoline vs. diesel from a barrel of oil. They can then legitimately say the higher diesel prices are due in part to limited supply despite the fact that they themselves are the ones that caused the reduction.

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