Why can’t you have sensible long term contracts in oil?

Just the sheer possibility of losing a tenure based on no particular fault of their own, could do wonders for the educational system, infusing it with a minimum required dose of uncertainty, and thereby allowing tenured professors to at least to understand the concept of anxiety.

Sir in “Double, or quit?” June 10, you say that “Volatile prices get in the way of sensible medium-term contracts to produce or deliver oil-intensive goods and services” June 10 and you are right but why on earth you cannot extrapolate that into the need for sensible medium-term or even long term contracts for oil itself, to bring down that uncertainty that hinders more investment is indeed very hard to understand.

Any explanation?

Sir Sheila McNulty reports in “Profit at Conoco mask oil industry’s problems” January 24 why even with high oil prices international oil companies find themselves with limited access to resources and an unclear path for investment, and which obviously must impact the availability of oil around the world.

In reference to this may I ask why on earth have not the consumers and the oil producers been able to agree on long term supply/take up contracts based on a reasonable initial price; and slowly adjusted to the real markets by means of a running twenty-year average moving price? The governments could help out, acting as buffers, for instance by charging gasoline taxes also in accordance with the price stabilization scheme.

I truly do not understand why no government from an oil consuming country has not empowered some agents to go out in the market and negotiate on their behalf some decent terms on oil for its constituency; exactly the same way I cannot understand why the government from a producing country has not gone out there to negotiate some of the stability that their economy and constituency need.

Clearly the incentives of having long term contracts at reasonable and stable prices would help the much needed investments in oil exploration to take off.