Commodity Trade Mantra

Posts Tagged ‘Brent Oil’

Global Oil could be a True Body Blow to the US Dollar

What happens when more parties reject the Brent quote as an accurate daily price quote for oil? President Putin has stated many times that he wants to move away from the US dollar in trade. Global oil buyers would soon fall into line & begin paying that basket price. If the Brent oil quote falls apart in Europe — replaced by Urals blend quote — It would be a true body blow to the US dollar.

Are Central Banks Running the Crude Oil Market or Just the World?

The price of oil has been rising, no matter how bad the oversupply news gets. How today’s oil prices are really determined is done by a process so opaque only a handful of major oil trading banks have any idea who is buying or selling oil futures or derivative contracts that set physical oil prices in this strange new world of “paper oil”.

Oil May Drop To $25 On Chinese Demand Plunge, Supply Glut, Ageing Boomers

Our view is that oil prices are likely to continue falling to $50/bbl and probably lower in H1 2015, in the absence of OPEC cutbacks or other supply disruption. Critically, China’s slowdown under President Xi’s New Normal economic policy means its demand growth will be a fraction of that seen in the past.

Everyone Loves a Discount—But Where’s the Support for Oil Prices?

Since June, crude oil has tumbled 30% to prices we haven’t seen in about three years. And if crude oil were to fall to $60 per barrel? An estimated 80 percent of U.S. companies that extract tight oil, or shale oil, through fracking would be shut down and all new supply would diminish quickly due to the rapid decline rate.

Why a Strong Dollar is the Mortal Enemy of Gold and Oil

The strong dollar pushed bullion prices down 6% in Sept, historically gold’s strongest month. This move is unusual also because gold has had a monthly standard deviation of ±5.5% based on the last 10 years’ worth of data. Oil’s slump is a little more complicated to explain. In a way, American shale oil has become a victim of its own success.

Oil Prices on a Decline - Is this Good News, or Bad?

Growth in oil consumption has mostly been outside of the US, EU & Japan, in the recent past. China & other emerging market countries kept demand for oil high, fueled by debt growth. This debt growth now seems to be stalling. Commodities such as oil & food are necessities. Why would less be needed? The issue, is affordability.

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