Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Revolution Or Evolution In The World Crude Oil Market?

Commodities / Crude Oil Mar 31, 2011 - 03:43 AM GMT

By: Dian_L_Chu

Commodities

Best Financial Markets Analysis ArticleBob van der Valk writres: Time has not made much of a difference since 2008...at least in the price of crude.  The price for the U.S. West Texas Intermediate (WTI) crude oil was $107 a barrel on September 28, 2008, vs. around $105 per barrel today. 

On the other hand, the average price at the pump was $2.57 a gallon then, compared with the average is $3.58 per gallon today.  The chart below shows the average price for the period from March 24, 2009 through March 24, 2011):



The reasons for the difference in the pricing of gasoline is exactly the opposite of why they were back on September 28, 2008.  Back then, the US economy went into a tailspin with fuel prices decreasing faster than crude oil prices. They eventually caught up with each other in early 2009 and have been increasing in-sync ever since.

Today's fuel prices are keyed more to the Brent crude oil price posting on the Intercontinental Exchange (ICE) in London instead of the WTI crude oil posting on the New York Mercantile Exchange (NYMEX), which has become somewhat inconsequential since it is landlocked in Cushing, Oklahoma. 

Cushing, OK is the delivery point of NYMEX from where WTI is shipped by pipeline to various U.S. Midwest and Gulf Coast refineries.  In contrast, the Brent crude oil inventories are held at a harbor in Belgium easily reached by any ship able to carry large amounts of crude oil into and out of that location.

The volatility in the price of crude is caused by any world events threatening crude oil supplies as they are the world's main source of energy.  Wall Street bankers and their clients are a big influence in the commodity market and tend to exaggerate prices by making bets for or against the price of crude oil causing speculation in the
oil markets.

Prior to the 1980’s, the price of crude oil was set by the parties involved in actually producing and refining it. That changed when the NYMEX started trading first in crude oil and gasoline, and added natural gas and heating oil later on.

Physical and futures markets were meant to run responding to actual supply and demand, but instead have added a layer of uncertainty for anyone producing fuel in order to keep prices within an affordable range to their consumers.

The Commodity Futures Trading Commission (CFTC) is now proposing limits for energy speculators. Ten big US banks will be affected the most and will have the option to trade on the Intercontinental Exchange (ICE) based in London, which does not have any trading limits.

Now, the Middle East and North African (MENA) revolutions have also been added to the equation making crude oil a commodity speculators dream to come true.  Trouble brewing in MENA and Saudi Arabia will keep both crude oil and fuel prices on an ever increasing path until the unrest settles down.

Iranian Oil Minister Massoud Mirkazemi, who currently holds the OPEC rotating presidency, was quoted as saying:

"There is no need for an OPEC emergency meeting in the current situation as the oil market is well balanced. OPEC is only able to pump about 30 million barrels of oil to the world markets per day, which is nearly a third of the global oil production." This was reported by the local English language satellite Press TV in Tehran, Iran report on Sunday, March 28, 2010.

OPEC will cut oil shipments to its lowest level since October as civil war halted exports of crude oil from Libya. OPEC oil exports are due to fall to 23 million barrels a day in the four weeks to 9th April, down 1.8 percent from 23.5 million in the period to 12th March.

Oil producers typically respond to strong price signals and are able afford to wait until OPEC’s regular meeting in the middle of June before deciding whether to raise crude oil output. It will be too little too late to prevent higher oil prices.

Crude oil prices are determined on a “futures” market at the NYMEX or ICE. The prices of crude oil traded today determine the future prices at the pump.  Thus, if the speculators see current inventories are sufficient to cover demand until futures contracts are delivered, the downward price happens almost immediately.

A war and revolution in Libya has caused higher prices for gasoline and diesel all the way in the U.S.  The lyrics in John Lennon’s song Revolution are as applicable today as they were back in 1968,

“You say you want a revolution? Well you know, we'd all want to change the world. But if you want money for people with minds that hate, all I can tell you is brother you'll have to wait”

About The Author - Bob van der Valk is an Independent Consultant with over 50 years of experience in the petroleum gasoline and lubricants industry.

Dian L. Chu, M.B.A., C.P.M. and Chartered Economist, is a market analyst and financial writer regularly contributing to Seeking Alpha, Zero Hedge, and other major investment websites. Ms. Chu has been syndicated to Reuters, USA Today, NPR, and BusinessWeek. She blogs at http://www.econmatters.com/.

© 2011 Copyright Dian L. Chu - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

careerideasshq
21 Dec 11, 02:16
Hot jobs

Simply because population advances as well as systems creates, varied work come to be "hot. inch On one occasion, telegraph police officers as well as cows people was sizzling hot projects. Now, having said that, awesome tasks call for devices as well as inventions which our grandma and grandpa more than likely hardly ever would have wanted.

Something which will produce work some sort of warm position is without a doubt preferred tradition. For example, quite a few younger people get wished to grow to be forensic pros plus researchers realize it's a huge since these work opportunities were made when enjoyable for common broadcast tv. Provided that we have at this moment existing cable tv channels dedicated in preparing food and even in house as well as outdoor house style and design, that culinary arts martial arts styles plus place layout are becoming 2 well known fields of study through universities everywhere over the state.

Social awareness of particular problems can also impact operate opportunities will be hot. Including, in the 1980's and 1990's, that elevate on the TOOLS strain stimulated plenty of people to look into medical-related homework so that they might possibly do his or her's component discovering get rid of this particular and also other bad scourges. Currently, most people have learned regarding universal warming with central class together with college, and have absolutely an even greater accolades pertaining to the environmental and also ecological worries. Hence, colleges and universities are actually full of learners researching environmentally-friendly (or even "green") technology. For instance powers that will never leave filth for the surroundings, energy-efficient family homes and also cleaning agent vehicles systems. You can basically surprise around the have an effect on many of these kids should have regarding your options for existence with the very not to distant future.

An occupation also can develop into sizzling when ever there are several options correctly. Some of the ways the industry debts on their own apart. One example is, examine birkenstock. On the internet the major lack from nursing staff before era possibly even longer, a new development in which is likely to remain for quite a while. Still, that experts claim there are which means that small amount of nurse practitioners has designed that searchers what person conduct grow to be nurse practitioners include not just a range of task gives you designed for them every time they whole his or her instruction and additionally guidance, however they will find take pleasure in generous benefits packages, a lot of twelve-monthly family vacation time period even more solution in the case of just what exactly working hours they can function. Eventually, phrase with the appearance about this livelihood is going to propagate, additionally, the caring for absence should for sure possibly be repaired.

And one can find a careers that will be usually favorite, nonetheless that will grown to be awesome ever so often. Have unique learning coaches to give an example. Specific e . d . trainers have got always been invaluable and additionally respected customers connected with contemporary society. Still this kind of job provides all of the sudden come to be "hot" since many of us have go through not to mention observed news media accounts on the rising selection of young children with the help of autism. Likewise, many more areas everywhere really are growing most of the specific erection dysfunction programs as your government authorities are suffering from a better awareness of acknowledge that there are these kind of software programs are capable of doing to get young people. And for that reason a job that's been about a long time has instantly grown to be sizzling hot.

[url=http://www.careerjobsfinder.com/]Career advice[/url]


Post Comment

Only logged in users are allowed to post comments. Register/ Log in