IMO Libya and Iran lack of normal production have been the primary reasons for high oil the past year or two and will be the reason for lower prices if production gets back to anywhere close to normal.
cav ... I understand what you're saying, and sometimes I take your POV. There are just so many things making an impact. I do believe "financialization" is a big one, and wonder if that variable will ever be fixed. There is the variable of supply and demand, and how that is impacted by geo-political events, but I'd like to see supply and demand, and geopolitical events without financialization. Exchange rates are big also. The EU needs the Euro down and can't do it. Heck, the Norwegian Krone (Brent) is extremely strong (Big Macs are almost $8) ... I don't know the exact the mechanics on how exchange rates all fits in with financialization but I suspect it is there.
Regarding your Iran/Libya post (and I understand what you are saying), oil jumped to the level it is at today 6-12 months before Iran/Libya. There is a correlating spike with Iran in early 2012 (but dropped off), and other geopolitical spikes, but I'd be willing to bet the closeness of the propose implementation of the CFTC rules over the last 4 years or so, has a better correlating impact on commodity prices starting a spike down, or at least the same as the correlation of geo-political events.
The CFTC indicated there were large players that had outsized positions in commodity derivatives, and I can't recall if that included the many smaller (or larger) positions that were held by players under the control of a few players ... i.e. having enough control to get the "elephants/many ants" moving in unison. So, the CFTC is proposing "aggregation" rules as well as "position limits". These commodity derivatives exploded exponentially in the early-mid 2000s.
The US isn't alone. We deregulated derivatives back in 2000 to be more like Europe, but today even Europe is saying this isn’t so good, and is planning to implement rules. But as I said, the airlines are really their own masters of their destiny ... they can react to oil prices and stay profitable. The economic growth with lower commodities would be
Do you really believe this? Because anyone who's ever tried to make a bet on oil moving on some "fundamental" has looked like an idiot the past dozen years. Read about "financialization" and you may understand why. Oil will do what it's going to do, and any attempt to predict price movements is futile. The good news is that there's a lot of oil out there and high prices make demand tepid, so the airline industry is largely shielded from a price spike.
Don't you think it would be going up with all the problems in Lybia,Syria, Iraq, Israel, Ukraine? If there wasn't war in those countries, then WTI oil would be trading at $82 today and not $93-just common sense.
I agree that there is "financialization" (as you probably know my POV is the same as yours regarding that), I still say we are closer to addressing that. Like I said the CFTC has proposed rules that are past their comment period and just have to be made final ... whether that is in a month, or a year ... and the EU isn't too far behind and intent on doing something. Though the financial industry is doing everything they can to kill it.
Obvious fundamental news is good though ... The talking shirts can't look too much like "Baghdad Bob".