Suncor Energy Inc T.SU

Oil production

[Farmer12]

The price of oil may at some very rare brief moment reflect the marginal cost of production. It always depends on the time span under consideration. Check the 50 year historical monthly oil prices on macrotrends. Other factors always intervene, geo-political, budgetary, local politics, environmental, lag times etc., particularly in the OPEC gulf states, where the marginal cost of production could be less than $10 in some cases. Oil is a political, critical commodity very susceptible to manipulation by influences unrelated to the marginal cost of production, such as political alliances, pressures or cartels.

[Experienced]

True.  The price of oil fluctuates for many reasons but there is a natural tendancy for the price to move back towards the marginal cost, up or down depending on what is happening.  And this is why I made the comment if people see a price spike due to temporary situations, take advantage of it and don't get sucked in by manipulators like Goldman and JPM In the case of OPEC that is

[Farmer12]

Good answer. The goal is to be one of the lowest cost producers, all in, and you will always have a meal ticket.