Oct 11, 2013
Higher gas prices despite higher inventories does not necessarily invalidate the supply and demand concept. What matters is not just the number of gallons, but the cost of the gallons. We're fortunate to still get a lot out of the low cost Permean Basin fields, but most of the rest of our "new" oil (deep water, fracking, etc.) is very expensive oil, thereby raising the value (cost) of whatever our aggregate oil inventory is over time.