Even The Mere Threat Of Drilling Will Bring Down The Price Of Oil

Don Chance has an editorial on IBDeditorials.com on how drilling now – or even threatening to – will reduce price of oil immediately. Essentially it encourages those storing oil (read: OPEC), on the expectation prices will go up, to start selling it now, as the new expectation is that prices will decline in the future.

Thus, the current price of any storable commodity will be affected by expectations of future supply because producers use those expectations to determine when to bring their product to market.