Quote:
Originally Posted by wig
While they can to some extent adjust the price, they can't adjust the level of supply, precisely because they lack the storage capacity to hold goods off the market.
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They can't adjust the supply, but they can adjust the demand. Cheap money = demand for everything else.
Quote:
Originally Posted by wig
Oil is going up because as was stated earlier, there is more demand chasing the resource. There are emerging economies like China / India with large populations that want what the west has and that takes oil. Oil is in everything. Same with Corn. Agricultural commodities have also been hit by climatic and natural disasters, so supply gets hit when that happens.
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The demand for oil in both China and India has been rising constantly and did so during the financial crisis as well. Demand never went down.