Exxon CEO Says Oil Should Cost $60 To $70 A Barrel

Analysis in the mainstream media gets rehashed on a regular basis. You have the so called researchers, writers, educators, and the privileged few who sometimes act as if the public is really beyond any type of understanding.

Propaganda and populism are ubiquitous as we sift through the nonsensical jumble of fabricated streams. The burnt ideology invades our critical thinking level. It’s absurd to even question the populous nowadays, or so they say at least.

More often than not, a simple basic understanding of any subject leads to real truth eventually. Everyone claims to be an expert and only the truly gifted are totally irrefutable. There are patents of knowledge on every corner of the street.

The speculation of oil for instance, we are told time and time again, has no bearing on what the price of oil commands. Again, MSM gives us the daily dose of disproportionate, manufactured consented news to brainwash those that do not dare to question authoritative journalism.

Today, the price of a barrel of oil is $96.48. The price has been hovering around this range for weeks now. Earlier in the year, a barrel of oil fluctuated over the $100 mark. Could there be other circumstances causing the fluctuation?

Here’s where I fail to grasp what the experts are saying. If political unrest is a key factor, then oil should keep rising indefinitely. Right? The world has seen more political thunderstorms this year than in past decades. Some predict that worldwide economic collapse is just around the corner. So, why has the price of oil fallen recently? How can you justify this? The truth is you can’t. It’s a rigged game.

On May 12, 2011, U.S. Senator Maria Cantwell (D-WA) at a Senate Finance Committee hearing, asked Exxon Mobil Chairman and Chief Executive Officer Rex Tillerson a simple question. What would the price of oil be if it was based on supply and demand fundamentals? Without the speculation?

Senate Finance Committee hearing

Senator Maria Cantwell: What do think the price would be today if it was based on the fundamentals of supply and demand?

Rex Tillerson: Well again it’s… If you were to use a pure economic approach the economists would say, would be set at the price to develop the next marginal barrel.

Senator Maria Cantwell: What do think that would be today?

Rex Tillerson: Well, it’s pretty hard to judge. But it would be, you know, when we look at it, it’s gonna be somewhere in the sixty to seventy dollar range. If you said, if I had access, that’s the assumption.

If I had access to the next marginal barrel, what would it cost, everything in, to put the next barrel of supply in? Now, soon as I develop that one and it depletes, then the next barrel marginal cost goes up. Okay, now over the years the industry has historically done a very, I think, successful job of mitigating that through technology advancements, efficiencies, things we learn how to do better to keep the cost of the marginal barrel down.

But in a purely economical, you know, if all things were according to economics and people didn’t risk manage and they didn’t do everything else they do, uh… it would be set at the marginal cost of the next increment of supply.

Senator Maria Cantwell: Sixty to seventy dollars a barrel of oil sounds pretty good today. I can tell you that.

In conclusion, Senator Maria Cantwell goes on to say: “Well, I would just say this — that with 70% of that futures market now being made up of speculators, that are not in use of that oil product is a problem.

“To go from having the market made up of 30% today of people who legitimately have to hedge, dominated by 70% of people who are just getting obviously in on this oil game is a problem. Do you agree?”