Commodity Trade Mantra

Posts Tagged ‘Oil Trading’

Oil Prices Distorted by Derivatives, Not Supply and Demand Based Any More

Supply and demand are functions of the physical market in oil consignments that tell us about actual oil being traded & not about the trade in paper barrels & other derivatives. Unfortunately, that’s what really determines oil prices – financial transactions involving oil derivatives, not the trade in oil itself. And here, there are several additional levels of derivatives impacting on the perception of price.

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.

Rise of the Petro-Yuan & the Slow Erosion of Dollar Hegemony

Linking the dollar to international oil trading was key to creating a new version of dollar primacy (“dollar hegemony 2.0”) & by extension, in financing another forty years of American hegemony. With the rise of the “petroyuan,” movement towards a less dollar-centric currency regime in international energy markets is already underway.

Erosion of Trust Will Drive Gold Prices Higher

An erosion of trust means that people are less willing to accept the counterparty risk that comes with financial assets that occurs during financial busts. People as a consequence move their wealth into tangible assets, like farmland, oil wells or in tangible forms of money, which means gold.

follow us

markets snapshot


Market Quotes are powered by Investing.com

live commodity prices


Commodities are powered by Investing.com India

our latest tweets

follow us on facebook