Tag: WTI

Wow. Turns out that in 2008 (into the mega rally time period) someone may have been “squeezing” oil after all.

As the FT reports:

The US commodities regulator has charged a trading house and two individuals with manipulating oil prices in 2008 by amassing dominant positions in the physical market that created the impression of a shortage. The charge is only the second oil manipulation case the US Commodity Futures Trading Commission has filed since launching a “nationwide crude oil investigation” three years ago as the cost of West Texas Intermediate, the US benchmark, surged towards a record high of $147 a barrel.

Kiran Stacey

In this week’s readers’ Q&A session, Amrita Sen, oil analyst at Barclays Capital, answers your questions.

In this second of two posts, she discusses drilling in the US, national oil subsidies and growing demand from the Middle East.

Earlier, she answered questions on whether speculation is driving up the oil price, whether such an increase could trigger another recession and when “peak oil” might occur.

(NB – Because of a very high volume of questions, we were not able to tackle every question submitted. Apologies if yours was not answered.)

Next week, Michael Bromwich, director of the US oceans regulator, will be answering your offshore-drilling queries. Email questions to energy.source@ft.com by the end of Sunday, April 10th.

But for now, over to Amrita:

Kiran Stacey

Firstly, an apology. We are still not ready to publish the Q&A session with Josh Fox. I will publish an update with a full explanation tomorrow (Tuesday), but for now, thanks for your patience.

While we wait for Josh’s answers, please start sending in your questions for Terry Duffy (pictured right) and Craig Donohue (pictured left), the chairman and CEO of CME Group, respectively.

The Chicago Mercantile Exchange is the home of the flagship WTI oil contract, and Duffy and Donohue are perfectly placed to answer all your questions about oil pricing: from why the spread between WTI and Brent is so high; to the possibility of a brand new flagship conquering the market; to what role speculators have played in pushing it up so high.

The deadline for questions is Sunday, February 20th, and their answers will be published on Friday, February 25th.

Speculation about the potential closure of the Suez canal is mounting on Friday, probably the reason that WTI prices are heading higher.

Notably, prices of Brent crude (which is not continent-blocked; it comes from the North Sea and doesn’t tend to get transported through the Suez canal) are not climbing.

Concerns are mounting that $100 oil prices, if hit, could be enough to dislodge the precarious global recovery — thrusting the world economy back into recession, or even worse, into another global financial crisis.

But while that is certainly a legitimate worry, there may actually be another equally pressing one rearing its ugly head too.

We’re talking about what happens if volatility in the WTI-Brent spread doesn’t settle.

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« AugDecember 2014