Filed under: Uncategorized | Tags: Brent, crude oil, Cushing, James Hamilton, peak oil, Seaway pipeline, spread, WTI
Blue is Brent, black is WTI, green is the spread between them.
A relatively recent phenomenon explained by James Hamilton:
West Texas Intermediate is a particular grade of crude oil whose price is usually quoted in terms of delivery in Cushing, Oklahoma. Brent is a very similar crude from Europe’s North Sea. As similar products, you’d expect them to sell for close to the same price, and up until 2010 they usually did. But an increase in production in Canada and the central U.S. combined with a decrease in U.S. consumption has led to a surplus of oil in the central U.S. This overwhelmed existing infrastructure for cheap transportation of crude from Cushing to the coast, causing a big spread to develop between the prices of WTI and Brent.
Filed under: Uncategorized | Tags: 2013 oil price, Brent, crack spread, crude oil, EIA, energy, gas prices, oil price predictions, refinery profits, transportation, WTI
Always kind of funny. Flat-line forever.
Filed under: Uncategorized | Tags: Brent, driving, oil prices, peak oil, vehicle miles traveled, Vmt
Filed under: Uncategorized | Tags: Brent, energy demand, North Sea, oil consumption, oil demand, oil price predictions, peak oil, the breaking point, US oil demand
Via Stuart Staniford’s Early Warning:
However, it’s also worth noting that the price required to make consumption decline has increased over time. In 2006-2007, prices of around $70 were enough to make oil consumption flatten and then decline. However, in late 2009 and 2010, similar prices obtained while consumption continued to rise. It took the rise to over $100 in spring 2011 to get consumption to start to decline again.
Filed under: Uncategorized | Tags: Brent, Fatthouh, futures prices, James Hamilton, Kilian, Mahadeva, NYMEX, oil prices, speculation, spot prices, WTI
A paper by Fatthouh, Kilian and Mahadeva (pdf)
Abstract: A popular view is that the surge in the price of oil during 2003-08 cannot be explained by economic fundamentals, but was caused by the increased financialization of oil futures markets, which in turn allowed speculation to become a major determinant of the spot price of oil. This interpretation has been driving policy efforts to regulate oil futures markets. This survey reviews the evidence supporting this view. We identify six strands in the literature corresponding to different empirical methodologies and discuss to what extent each approach sheds light on the role of speculation. We find that the existing evidence is not supportive of an important role of speculation in driving the spot price of oil after 2003. Instead, there is strong evidence that the co-movement between spot and futures prices reflects common economic fundamentals rather than the financialization of oil futures markets.
Filed under: Uncategorized | Tags: Brent, Chris Cook, cornucopianism, EROI, market manipulation, Naked Capitalism, peak oil, refineries, WTI
…has little to do with geology, EROI and all that, and everything to do with manipulation by market players. An interesting take, although I don’t get on board with any analyst that completely ignores an entire wing of the mental hospital of energy ideas.
Filed under: Uncategorized | Tags: Brent, Cushing, Gulf Coast leg, Keystone XL, NYMEX, oil pipelines, pipelines, TransCanada, WTI
Doesn’t need fed approval for that.
TransCanada said Monday that a 700,000 barrel-per-day Gulf Coast leg originally part of the Alberta-to-Texas Keystone XL proposal is now a separate $2.3-billion US project that doesn’t require a cross-border presidential permit. Obama denied Keystone XL a construction permit in January, following a delay of the project last November caused by an extension of U.S. environmental review.
The link between an oversupplied Oklahoma oil storage hub and the world’s largest refining market in Texas will help relieve a glut in crude supply in the U.S. Midwest upon startup in mid to late 2013, the company said.
Filed under: Uncategorized | Tags: Brent, crude oil, crude oil prices, EIA, energy, Energy Information Administration, NYMEX, oil price, oil price predictions, oil prices, peak oil, WTI
Consider in light of their historical track record, which has … not been good.
Filed under: Uncategorized | Tags: Brent, crack spread, crude oil and gasoline prices, energy, fuel prices, gas prices, James Hamilton, oil price, peak oil, petrol, petroleum, WTI
My rule of thumb has been that for every $1 increase in the price of a barrel of crude oil, U.S. consumers are likely to pay 2-1/2 more cents for a gallon of gasoline.
Hamilton points to the lack of adequate pipeline infrastructure in the US to explain the gap between Brent and WTI.
Filed under: Uncategorized | Tags: albatross, Brent, crude oil, fuel costs, gas prices, gasoline, Jevon's Paradox, Peak Demand, Peak Everything, peak oil, vehicle miles traveled, Vmt, WTI
VMT (Vehicle Miles Traveled) up slightly in December relative to last December, but down overall for the year, and below its previous peak now for 49 months. With fuel prices on the rise it doesn’t look like it will break above that for quite some time — if ever.
But what do I know.. People are buying cars again. It’s Halftime in America and “the SUV is back.”
From the DOT: