Apparently, not anymore!
"The OPEC cut did not have any positive affect on oil prices and everybody is so depressed," said Abdullah al-Rashoud, chief executive at Riyadh-based KSB Capital Group.
I think that is the proof that oil price is now determined by factors other than the supply and demand between producers and the industrial buyers. One such factor is selling off of the future contracts on the open market to raise the cash by the speculators (hedge funds). I predict that even if they cut oil production to zero, the official crude oil price would still be falling because those who sell that paper really want to sell while those who buy that paper want less and less of it, not more. If suddenly paper oil fell to 10$/barrel and if you tried to order on the spot some physical oil at that price, you would probably be told to wait 52 weeks or go to hell. It is exactly the same with gold and silver, I think, except people have sniffed that already out but not about oil yet. The difference is that there are plenty of investors wanting to get physical delivery of silver at 9$/oz but can't, whereas no private investor has probably tried yet to buy 100,000tons of crude oil and get it physically delivered!
Falling oil future prices means simply fall of the future price of the paper contract not oil itself. It's the same with gold. It cannot of course last and sooner or later the bluff will have to be called. Already, coin dealers are charging 60% surcharge on silver coins or using ebay prices ignoring Comex spot price altogether. I wonder also, if the Comex exchange gives silver spot delivery time of 14 weeks, as some reported - does that mean that they believe that in 14 weeks time silver will be really costing 9$ and they will be able to cover, or do they believe that in 14 weeks something might happens that will make all their outstanding obligations irrelevant?
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