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Post by Deleted on Jul 1, 2011 7:23:55 GMT -5
Crude oil prices continued to climb June 29 with crude escalating 2% in New York, back to levels prior to the International Energy Agency’s announcement of the pending release of 60 million bbl from members’ emergency petroleum reserves.
Just a week ago, IEA announced it would release the crude and product from emergency reserves in an effort to drive down oil prices. Now the “flat price is already back to its pre-IEA level, and Brent has regained most of its premium to West Texas Intermediate,” said Olivier Jakob at Petromatrix, Zug, Switzerland. “From the price action, we have to conclude either that the supply and demand is so tight that 30 million bbl of sweet oil release from the US Strategic Petroleum Reserves does not matter or that the futures markets are disconnecting from the reality of the physical markets,” he said.
“Brent futures regaining most of its premium to WTI remains for us a very intriguing phenomenon when the Brent 2011 backwardation has disappeared, the Light Louisiana Sweet (LLS) premium to WTI is eroding, and the physical premiums for Forties or West African crude oil are falling to the pre-Libya levels. We find it difficult to currently attach anything to the relative strength of Brent futures vs. WTI futures,” Jakob said.
Since prices at the USA pumps is tied to LLS, expect retail gasoline prices to continue to fall. jma23
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floridayankee
Junior Associate
If You Don't Stand Behind Our Troops, Feel Free to Stand in Front of Them.
Joined: Dec 20, 2010 14:56:05 GMT -5
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Post by floridayankee on Jul 1, 2011 10:00:32 GMT -5
“From the price action, we have to conclude either that the supply and demand is so tight that 30 million bbl of sweet oil release from the US Strategic Petroleum Reserves does not matter or that the futures markets are disconnecting from the reality of the physical markets,” he said. I said it two weeks ago when the announcement came down about releasing strategic reserves....there is no shortage of oil. |
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Post by Deleted on Jul 1, 2011 10:42:09 GMT -5
That and the fact that global demand is wandering around 80 million barrels a day, 60 million doesn't go very far. Obama's political posturing with the release lasted a week. With gasoline pump prices dropping anyway he can now try to claim credit for the drop. When oil prices recover slowly with the slowly recovering economy (for some) the silence from the media on the ineffectiveness of the SPR release will be deafening.
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Post by BeenThere...DoneThat... on Jul 1, 2011 11:16:31 GMT -5
>>> Obama's political posturing with the release lasted a week. With gasoline pump prices dropping anyway he can now try to claim credit for the drop. <<< ...I thought about this, too... but he's not the first POTUS to make me wonder, though...  ...and let's face it... in a world effectively built upon the need for cheap energy, there's ALWAYS something political afoot... imo...  ...btw... we need an oil rig emoticon...  |
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Post by Deleted on Jul 1, 2011 11:53:24 GMT -5
>>> Obama's political posturing with the release lasted a week. With gasoline pump prices dropping anyway he can now try to claim credit for the drop. <<< ...I thought about this, too... but he's not the first POTUS to make me wonder, though... ...and let's face it... in a world effectively built upon the need for cheap energy, there's ALWAYS something political afoot... imo... ...btw... we need an oil rig emoticon... Bush 2 did it also if I'm remembering correctly. Not a good sign to see the "strategic" oil reserves used for political gain through price manipulation. |
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