Posts Tagged ‘oil fundamentals’

Paper and barrels, pushing and pulling oil prices: Petrodollars

It’s an old debate: Is it fundamentals or trading that primarily drive oil prices? As John Kingston, previously of Platts and now president of the McGraw Hill Financial Global Institute, explains in this week’s Oilgram News column, Petrodollars, it’s not always an either/or debate.

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In the maelstrom of oil price news, has bias triggered trading mistakes? Petrodollars

In this week’s Oilgram News column, Petrodollars, Ned Molloy asks the question, have emotions and confirmation bias triggered trading mistakes in the maelstrom of oil price news?

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EIA analysis: US oil stocks rise, Canadian imports set record

US crude, gasoline and distillate stocks rose across the board last week, according to US Energy Information Administration oil data released Wednesday. Canadian crude imports increased 494,000 b/d to 3.25 million b/d, setting a weekly record high.

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IEA notes big jump in global oil supply in February

The oil market is no stranger to conflicting price signals, and the current period of relatively calm prices is a case in point.

The ongoing standoff between Russia and the West has so far caused only a relatively small, and short-lived rise in crude prices, despite the huge importance of oil trade between Russia and Europe, in particular.

If you want to know why the reaction was not bigger, you might want to take a look at the latest monthly report from the International Energy Agency, which has some very interesting data in it.

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China unveils oil pricing reforms, but lacks complete clarity

China’s long-awaited oil pricing reforms have finally been unveiled. But  the system may have become less,  not more, transparent.

First, some background. In 2008, the government introduced a system of setting retail prices which in theory would raise or cut regulated prices of gasoline, gasoil and kerosene if the rolling 22-working day average of a basket of Cinta, Brent and Dubai benchmark crudes fluctuated more than 4%.

The aim was to move domestic prices closer in line with international crudes so they would reflect the crude procurement costs that refiners bear. This was particularly pressing given the dramatic boost in China’s crude imports, from 30% of its total needs in 2000 to just under 58% last year.

In reality, the system only worked well under two conditions: when oil prices were around $100/barrel and when inflation in China was relatively benign. In much of 2011, when record inflation loomed, the government, worried about the impact on economic growth, made little move to adjust prices upward. That resulted in refiners bleeding at the pump and in some cases curbing production, causing shortages in some areas.

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Same secretary general, same oil output ceiling for OPEC

It came as no surprise earlier Wednesday that OPEC ministers had failed to agree on a new secretary general and had asked Abdalla el-Badri to stay in the post for another year.

Despite its claim to be an economic organization, OPEC is riven by politics and political in-fighting has overshadowed the post every time it has come up for grabs.

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How can OPEC agree output policy if it has trouble choosing a secretary general?

Appointing a secretary general to run OPEC’s Vienna headquarters should be easy. It never is. The job is technically an administrative one, but political rivalries between key producers have overshadowed the appointment process for years.

We’re talking primarily about OPEC kingpin Saudi Arabia and Iran, but with Iraq now having overtaken Iran to become the oil cartel’s second biggest producer, Baghdad may well turn more assertive about its right to the post in the future.

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Now we are one: Europe’s 10 ppm gasoil contract marks its first anniversary

It may well have passed your attention, but the low sulfur ICE gasoil contract marked its first birthday this week. How come this wasn’t marked on my diary? Is my smart phone playing up? Has my secretary let me down? Should I send flowers? Chocolates? How do I mark this occasion? Or you might think… ‘Er… And…?’

Well, hold hard there; this is important. New futures contracts come along from time to time, and most are rapidly consigned to the dustbin of history, passing unremarked and–critically–untraded. Not this one. This is widely touted to be the future, the apprentice to one of the most successful futures contracts that’s currently out there. Read the rest of this entry »

EIA analysis: Isaac hits crude stocks

As expected, the weekly Energy Information Administration inventory report showed the impact of Hurricane Isaac. With almost 95% of normal Gulf of Mexico oil production shut in at one point, a large drop in inventories was expected, and that’s what happened. You can see Platts’ analysis of it here.

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EIA analysis: US crude oil stocks rose 3.778 million barrels

Even as Hurricane Isaac was shutting down most oil production in the Gulf of Mexico, and a good chunk of natural gas production, both the Energy Information Administration and the American Petroleum Institute were reporting builds in crude oil stocks last week, contrary to expectations. You can read Platts analysis of the numbers here.

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