Jim Letourneau's Blog

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George Soros on Oil Prices

  1. Increasing costs of new fields and depletion of old fields

  2. Backwards sloping supply curve - the higher the price goes the less incentive the oil producing countries have to convert appreciating underground oil reserves into above ground dollar reserves which are depreciating.

  3. Subsidies in countries with growing oil demand.

  4. There is plentiful speculation which is increasingly affecting the price. The price has a parabolic shape which is characteristic of bubbles.

Click here to listen to George Soros talk about the price of oil.