Flame Conference Amsterdam - March 2009
Sarah Emerson Presentation on the high price of oil in 2008
SUMMARY: The elimination of significant spare capacity in the global oil supply chain had weakened the dominance of the physical market in terms of price direction. For the time being that trend has been suspended
The paper markets respond as much to "their" fundamentals as the physical fundamentals; predicting the future of oil prices will depend as much on understanding the paper fundamentals as the physical fundamentals
But even when these fundamentals diverge, the physical fundamentals will eventually dictate price, but the equilibrium price in a supply demand model of the oil market may take time.