Oil market is free market... Is this a joke?

I was reading a discussion on Jeff Matthews' blog about the campaign organized by the airlines to fight the outrageous oil prices: StopOilSpeculationNow. The bottom-line of the discussion seemed to be that free market sets the price and airlines should've played the derivatives markets better to hedge themselves.
Now, there is some sense in this idea except for one thing that really bothers me. How can anybody be so naive to call the oil derivatives market a "free" market??? I am not even going to discuss the derivatives part of it with its rules and regulations, but the oil part...
Free oil market? Seriously?The oil market depends so much more on the political players rather than on economic ones that calling it a free market in its traditional meaning seems like a cruel joke.
I have little doubt that if Gore won the elections in 2000, now we would be discussing if the oil prices could go as high as $10 per barrel instead of discussing if they can get to $200 per barrel...

2 comments:

Anonymous said...

"....if Gore won the elections in 2000, now we would be discussing if the oil prices could go as high as $10 per barrel instead of discussing if they can get to $200 per barrel"

I thought that this was a serious blog about IR issues? Having read the above, I realise that it isn't.

Sorry, but it's coming out of my bookmarks, and I won't be back.

Alexander said...

Sorry to disappoint you, but also thank you for the "teachable" moment. See, when ostrich is scared (read: does not like something or does not agree with something), it hides its head in the sand (read: deletes it from its bookmarks). How much do you think it helps the ostrich? :)