Saudi Arabia on Wednesday decided to drop the widely used West Texas Intermediate oil contract as the benchmark for pricing its oil, dealing a serious blow to the New York Mercantile Exchange.
The decision by the world’s biggest oil exporter could encourage other producers to abandon the benchmark and threatens the dominance of the world’s most heavily traded oil futures contract. It is the main contract traded on Nymex.
The move reveals the growing discontent of Riyadh and its US refinery customers with WTI after the price of the price of the benchmark became separatedfrom the global oil market this year.
The surge in oil inventories in Cushing, Oklahoma, where WTI is delivered into America’s pipeline system, depressed the value of the WTI against other global benchmarks, throwing the global oil market into disarray.
In January, WTI, which usually trades at a premium of $1-$2 a barrel to Brent, fell sharply, leaving it at a discount of almost $12 – a record gap. This dislocation in the market continued well into the summer.
From January, Saudi Arabia will base the price of oil for its US customers on a new index developed by Argus, the London-based oil pricing company.
The Argus Sour Crude Index will track the price in the physical market of a basket of US Gulf Coast crudes, including Mars, Poseidon and Southern Green Canyon.
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There's no reason why oil shouldn't be at $12 a barrel considering the incredibly sharp drop in demand in the past year.
ReplyDelete$80 a barrel represents the power of the oil industry and oil cartels to manipulate the price of a barrel of oil.
No surprises here.
Do you really think argus oil out of london where the brits pay $8.00 pr/gl plus, is going to price it $12 a barrel? Your days of cheap gov/subsidized gas/diesel is over come the new year.
ReplyDeleteYeah, I think 9:39 is living in fantasy land. Even at $80 a barrel a gallon of gasoline is cheaper than a latte at Starbucks. Maybe you should determine the price of oil that way everone can be happy in their little unaware spheres and keep driving their SUV's until the cows come home. Or not!
ReplyDeleteThis would be a great time for the US to roll out one of those "suppressed" energy technologies that makes 1960 hippies tell their buddies that they have a car that "runs on water man!"
ReplyDelete:)
Sharemarkets going to go gangbusters tomorrow. Buy some shares now to get in the money! Recovery is moving fast now!
ReplyDeleteDavid Karesh tried to produce his own oil and look what happened to him and his band of waco's
ReplyDelete$12 a barrel is not government subsidized in the least. Worldwide production of oil is tremendous compared to consumption. If true supply/demand dynamics where being allowed to set the price of a barrel of oil it would be around $12. $80 a barrel is not cheap at all.
ReplyDeleteGas was about $1 a gallon not too long ago.
You think nobody remembers how a real economy is supposed to work.
They pay around $1/gallon in mexico right now and also in Venezuela and Brazil.
Obviously we are being shafted as usual by the oil industry squeezing the cash cow for every last iota of wealth.
Oil dependency and scarcity is just another scam by our owners. Thermal energy could easily provide heat/energy to everyone on the planet with NO pollution, unlimited.
ReplyDeleteTo the poster above, YES - free energy is real. Nicolai Tesla did it before your granny was born.
We cannot have these of course. That would mean freedom. That is the last thing our owners want. They require false scarcity, control, slavery.
We are handed BS like man-made Global Warming so they can control each person's life right down to how much air you are breathing. You are spreading toxins by breathing. You are bad for the planet and must be controlled and regulated.
Watch Fall of the Republic.
Watch videos on the greatest inventor ever - no not Einstein, not even close - Nicolai Tesla. Learn why the elite basically waged war against him as he discovered all sorts of ways to make our lives better via technology.
The same technology that they hoarded away. Think about a car. It is the same as it was 80 years ago. Ridiculous. That is ONLY because technologies have been taken hidden from the masses.
Everything you have that you think is high tech is a joke. Crumbs fed to you by your owners.
You guys are allowing myths, half-truths, and presumptions to guide your understanding of the world's resources and the economy. Most of it does not stand up to the scrutiny of actual reality and I am not speaking from the perspective of Big Oil. Do some fact checking my friends, it aint too hard.
ReplyDeleteFurthermore, perpetual energy gizmos have been shown to be worthless.
Look at what an audacious liar 5:18pm is.
ReplyDeleteWhy, you'd think he was OBAMA HIMSELF.