[Marxism] PEMEX looks to lock in current oil prices

Aaron Aarons aaron at mylists.fastmail.fm
Fri Jul 25 03:32:39 MDT 2008


It seems to me that one effect of the locking in of a large share 
of future production with set-price contracts would be to create 
greater instability in the prices of oil outside of such contracted 
transactions. This is because the larger the proportion of oil that 
is being traded at preset prices, the smaller the size of the "free" 
(i.e., not pre-contracted) market and thus the larger effect on 
"free" market prices of whatever variations in production and 
consumption occur.

I realize I'm not using the terms used by professional economists, 
bourgeois or Marxist, but I hope my argument is clear. Whether it's 
valid or not is another story.

 - Aaron

Unwrapped (long-line) version of the above,
for those like me who prefer it:

It seems to me that one effect of the locking in of a large share of future production with set-price contracts would be to create greater instability in the prices of oil outside of such contracted transactions. This is because the larger the proportion of oil that is being traded at preset prices, the smaller the size of the "free" (i.e., not pre-contracted) market and thus the larger effect on "free" market prices of whatever variations in production and consumption occur.

I realize I'm not using the terms used by professional economists, bourgeois or Marxist, but I hope my argument is clear. Whether it's valid or not is another story.




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