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Perhaps I don't understand you, but isn't this simple hedging? Southwest Airlines, a huge consumer of petroleum products, used gasoline futures markets in order to take the volatility out of its costs. Anyone who is smart enough, and who desires to remove such volatility, can hedge their exposure to rising gasolinie prices. I think that's why the petroleum futures markets developed in the first place, isn't it?

You suggested that the futures contracts should be made between oil extractors and the ultimate consumers of refined petroleum products. Why should that be? Do you believe that an intermediary such as the New York Mercantile Exchange makes such hedging much more efficient? Such an exchange makes it possible for thousands of oil producers, hundreds of oil refiners, and millions of refined petroleum products consumers to all efficiently reduce their risk.

Is it possible, Per, that for many consumers gasoline costs have not been large enough to justify the transaction costs – especially the analysis time – of engaging in fuel hedges? I suspect that will change for some consumers, but most will simply opt for more efficient consumption of energy.

In other words, with gas over $4.00 per gallon, the dollar has lost 60 or 70% of its value.

Maybe I can pay for a loaf of bread soon with a quart of oil!

How should one interpret price "information" when one cannot rely on the value of the accounting unit, the dollar? Is oil going up or is the dollar going down? Are both going up, or both down, but at different rates? I'd look at other commodities., e.g. copper, for the answer.

Absolutely preventable! Where were the consumers willing to commit to a floor in the oil prices in order to have their prices capped and so help to support the oil investments that were needed?

Per, here’s why you should hire me:

1) Wrong. There was zero way to prevent this runup in oil. China has doubled it’s oil consumption every decade since 1990 (exponential). It will surpass us next decade, because China contains 1/6th of the planetary population. China has zero domestic oil supply.

2) Floor: impossible: there is no way to induce private investment unless return is amenable. Oil sucked for 30 years (see below).

3) The oil investments “that were needed” were made: return on investment for the oil industry was the highest of the past 20 years: Oil sucked for 30 years; now its back (and half-government-induced).

Per, there is no way whatsoever that you (or anybody else) could have "prevented" the current situation.

The questions therefore become who 1) understands the current situation (you do not), and 2) which presidential candidate will cause the least harm?

1) Prices incorporate information,

2) This information includes futures, plus spot prices.

Sorry, Name is correct here; the stock mkt predicts (rather innacurately) roughly 6 months out, futures are as published (esp front-month contracts).

Our expectations of oil prices have increased somewhat dramatically. Historical VWAP of spot crude would probably be smooth, and meaningless.

EIA published demand numbers (see above) are far more relevant here….