Crude oil wealth questions and fixed price mechanisms
Crude oil prices shot up last year to $147/barrell, and now, it is
down by more than 50%.
We all know that oil-exporting countries made a lot of money during
this boom. Here are my questions regarding this boom and oil prices in
1. The PRODUCING nations made a lot of money as did the commodity
traders, and perhaps even the derivative traders. Did the people DOWN
the supply chain make money, such as the proprietors of the gas
2. We can all see and hear about how much money countries like Dubai
and Russia has made from very high-priced crude oil prices. However,
when crude oil prices are LOW, do we see a similar kind of economic
growth amongst the CONSUMERS of crude oil prices? My quick answer is
"YES", but the consumers "invest" their surplus funds (surplus since
gas is cheap) on wasteful projects, such as gas-guzzlers.
3. Are the consumers better investors than the oil-producing
aristocracy (i.e. derivatives/commodity traders, oil politicians,
4. If exchange rate pegs can be set, why can't there be a target-
price per barrell of oil? This would have many benefits such as
pricing stability, and the pricing mechanism would involve reducing/
expanding production of oil.