to speak of light vs heavy as though there are not dozens of single grades, still more blends and without taking refinery upgrades - greater throughput (distinct from capacity) - is meaningless.
failure to take industry history into account also creates problems, since other than during its first few decades, the oil industry has followed a trajectory from national monopolies to competing international monopolies to production sharing agreements between these (Redline Agreement, etc). Managed production and from that managed pricing.
The formation and rise of OPEC - a cartel - created short run problems for integrated oilcos but these nations and firms had and have more common interest than not.
OPEC was effectively broken by internal conflicts, overproduction, and a new generation of non-OPEC producers. In effect, OPEC died in the mid 1980s - slightly after the creation of the futures contracts (London IPE), followed a few years later, 1983, by the NY Merc's contracts.
This was not immediately disruptive but created the groundwork which, with the advent of global electronic trading platforms such as the ICE (which acquired the IPE in '81), the rapid expansion of commodity funds and pools, the flow from pension funds seeking greater returns, etc., resulted in an at least apparent change in the mode of price formation, with greater weight on the speculative side. (Recall that more trading takes place through obscure OTC transactions; that the relatively transparent Merc is only one element).
Simple, straightforwards answer: none of the marker crudes (WTI, Brent, Dubai/) price on a strictly fundamental basis other than longer term.
The CL price is driven by speculative activities and can/does diverge greatly from what supply/demand/cost of production would dictate.
There is absolutely no shortage of crude in the world today; OECD stocks have been building for months while demand has slowed; China demand, unlike the steep 2003-04 rise, has been flat for the first three quarters of this year.
NY Merc trading is trade in paper barrels, less than a percent take delivery. I expect CLM6 should exhibit a nice pull back as weather plays fade and as it becomes still more evident that the global econ isn't growing so well as presently portrayed.
