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OilPrice.com | Energy | Oil Prices Crude oil price analysis and research that covers crude oil futures and oil price forecasts. We also look at events that cause oil price movements. http://oilprice.com/ Fri, 25 May 2012 1:25:19 GMT Oilprice.com (info@oilprice.com) What's Driving Oil and Gasoline Prices in the US? http://oilprice.com/Energy/Oil-Prices/Whats-Driving-Oil-and-Gasoline-Prices-in-the-US.html Here I comment on some recent developments affecting oil and gasoline prices.There is no oil shortage in the central United States, and has not been for some time, thanks to increased production from Canadian oil sands, North Dakota, and the Midwest United States:Source: Borenstein and Kellogg (2012).At the same time, demand in the U.S. is down, as Americans are driving fewer miles than in 2008 with more fuel-efficient cars:Source: EIA.The result has been that oil is piling up in the central U.S. With inadequate pipeline capacity to transport that…

]]> flybiggles555@yahoo.com (James Hamilton) Fri, 18 May 2012 23:50:24 GMT http://oilprice.com/Energy/Oil-Prices/Whats-Driving-Oil-and-Gasoline-Prices-in-the-US.html Oil Prices Could Follow Gas Prices Down as Demand Decreases http://oilprice.com/Energy/Oil-Prices/Oil-Prices-could-Follow-Gas-Prices-as-Demand-Decreases-and-Production-Increases.html It’s not entirely a serious proposition — yet.But the point is the global market for hydrocarbons is undergoing a fundamental change, and whether you are a major energy consumer or not, the impact will be felt throughout the manufacturing landscape.In the short term, it is difficult to see how prices can go any way but up. As the Economist Intelligence Unit wrote last week, the price for dated Brent Blend averaged US $125.50 per barrel in March, up from US $119.70 per barrel in February and just US$107.90 per barrel in December 2011.These…

]]> Burnss@oilprice.com (Stuart Burns) Wed, 25 Apr 2012 21:26:02 GMT http://oilprice.com/Energy/Oil-Prices/Oil-Prices-could-Follow-Gas-Prices-as-Demand-Decreases-and-Production-Increases.html The Problem with Banning Oil Speculation http://oilprice.com/Energy/Oil-Prices/The-Problem-with-Banning-Oil-Speculation.html Joseph P. Kennedy II, former Congressional Representative from Massachusetts, and founder, chairman, and president of Citizens Energy Corporation, has a proposal to make energy affordable for all. All we have to do, Kennedy claims, is "bar pure oil speculators entirely from commodity exchanges in the United States." Writing in the New York Times last week, Joseph Kennedy (D-MA) explained why he believes that speculators are responsible for the high price that we currently have to pay for oil: Today, speculators dominate the trading of oil futures.…

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]]> flybiggles555@yahoo.com (James Hamilton) Fri, 20 Apr 2012 22:33:56 GMT http://oilprice.com/Energy/Oil-Prices/The-Problem-with-Banning-Oil-Speculation.html Should we Limit Speculation in the Oil and Gas Markets? http://oilprice.com/Energy/Oil-Prices/Should-we-Limit-Speculation-in-the-Oil-and-Gas-Markets.html Let’s Play ‘Blame the Speculators’Most people would probably agree that speculation in the oil and gas markets is hurting American consumers. Consider the case of Aubrey McClendon. Mr. McClendon is the CEO of Chesapeake Energy, where he sells natural gas for a living. Natural gas prices have now been pushed down — by speculators — to below $2 per million BTU. This is a drop of more than 80% from 2008 prices. With these depressed prices, Mr. McClendon will have a hard time ever matching his $112 million of earnings…

]]> pir@oilprice.com (Robert Rapier) Fri, 20 Apr 2012 12:25:20 GMT http://oilprice.com/Energy/Oil-Prices/Should-we-Limit-Speculation-in-the-Oil-and-Gas-Markets.html How the U.S. Could Protect Itself Against Volatile Oil and Gas Prices http://oilprice.com/Energy/Oil-Prices/How-the-U.S.-Could-Protect-Itself-Against-Volatile-Oil-and-Gas-Prices.html Global oil prices are driven by a ‘rule of thumb’ that suggests prices will go up when the spare capacity of oil available on any given day is less than 5% of expected global demand. In today’s high priced oil market that swing in spare capacity is about 2%. This a big deal because traders worry about risk such as events in the Middle East, or with Iran or any other places that supplies oil. Spare capacity or swing productive capacity is the volume of oil than can be delivered as a percentage of expected global demand…

]]> huntga@oilprice.com (Gary Hunt) Tue, 17 Apr 2012 22:25:15 GMT http://oilprice.com/Energy/Oil-Prices/How-the-U.S.-Could-Protect-Itself-Against-Volatile-Oil-and-Gas-Prices.html Why Saudi and US Attempts to Influence Oil Prices are Ineffective http://oilprice.com/Energy/Oil-Prices/Why-Saudi-and-US-Attempts-to-Influence-Oil-Prices-are-Ineffective.html If you have the power and the desire to bring down oil prices, the best way to proceed is to start bringing them down. The easiest and fastest method would be to make more supplies available to the world market and keep adding until you reach your target price. The less you say about what you are doing, the better. When market participants are filled with uncertainty about your intentions, they have only the direction of prices to guide them. That means the speculative players can help you achieve your goals more quickly as they panic out of their…

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]]> cobbi@oilprice.com (Kurt Cobb) Mon, 26 Mar 2012 22:25:10 GMT http://oilprice.com/Energy/Oil-Prices/Why-Saudi-and-US-Attempts-to-Influence-Oil-Prices-are-Ineffective.html Crude Oil Analysis for the Week of March 26, 2012 http://oilprice.com/Energy/Oil-Prices/Crude-Oil-Analysis-for-the-Week-of-March-26-2012.html After failing to pierce the previous week’s low at $104.29, May Crude Oil made a low at $104.50 and proceeded to rally sharply higher. The market still closed lower for the week, but the close near the high indicates that crude oil may be developing some upside momentum.The short-term range is $110.95 to $104.29, making $107.62 a key pivot price. A breakout over this price and the market will be set up for further upside action. A failure at this pivot could mean the formation of a secondary lower-top which is often indicative of selling…

]]> axempire@oilprice.com (FX Empire) Sun, 25 Mar 2012 15:15:06 GMT http://oilprice.com/Energy/Oil-Prices/Crude-Oil-Analysis-for-the-Week-of-March-26-2012.html Crude Oil Analysis for the Week of March 19, 2012 http://oilprice.com/Energy/Oil-Prices/Crude-Oil-Analysis-for-the-Week-of-March-19-2012.html May Crude Oil finished the week with a slight gain. It was a quiet week with the market showing a bias to the downside until Friday when prices surged, taking back all of the week’s losses. Two week’s ago, crude oil posted a weekly closing price reversal top which typically leads to a 2 to 3 week break equal to at least 50 percent of the previous rally. Last week the market finished its two week decline but failed to reach its minimum objective of $103.61 before buyers stepped in at $104.29. Although the late week rally didn’t…

]]> axempire@oilprice.com (FX Empire) Mon, 19 Mar 2012 21:41:05 GMT http://oilprice.com/Energy/Oil-Prices/Crude-Oil-Analysis-for-the-Week-of-March-19-2012.html The Global Economy is Now More Vulnerable to Oil Prices than Ever http://oilprice.com/Energy/Oil-Prices/The-Global-Economy-is-Now-More-Vulnerable-to-Oil-Prices-than-Ever.html This paper examines the impact of oil price changes on global economic growth. Unlike some recent studies, this paper finds that oil price rises have had significant negative impacts on world economic growth. A time-series analysis of the data from 1971 to 2010 finds that an increase in real oil price by 10 dollars is associated with a reduction of world economic growth rate by between 0.4 and 1% in the following year. As oil prices approach historical highs, the global economy may be vulnerable to another oil price shock. As oil prices approach…

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]]> tol@oilprice.com (The Oil Drum) Wed, 14 Mar 2012 22:36:46 GMT http://oilprice.com/Energy/Oil-Prices/The-Global-Economy-is-Now-More-Vulnerable-to-Oil-Prices-than-Ever.html Crisis in Libya Shows the Effects of Production Downtimes http://oilprice.com/Energy/Oil-Prices/Crisis-in-Libya-Shows-the-Effects-of-Production-Downtimes.html The spill-over of the political revolutions from the neighbouring countries to Libya and the resulting civil war have highlighted the threat caused by production downtimes in politically unstable countries. Although with an oil production of about 1.65mn barrels/day (2010; some 1.5mn barrels/day of those were exported) the country accounts for only 2% of global production, the price of Brent increased by about 25% between February and April last year. The influence of downtimes on the oil price does not only depend on the quantity of the production…

]]> stoeferle@oilprice.com (Ronald Stoeferle) Tue, 13 Mar 2012 22:55:21 GMT http://oilprice.com/Energy/Oil-Prices/Crisis-in-Libya-Shows-the-Effects-of-Production-Downtimes.html Oil Price Development from the Perspective of the Austrian School of Economics http://oilprice.com/Energy/Oil-Prices/Oil-Price-Development-from-the-Perspective-of-the-Austrian-School-of-Economics3115.html The Austrian School provides a new angle on the development of the oil price. We already discussed the oil price development from the perspective of the Austrian School of Economics in our Oil Reports 2010 and 2011. The recent economic events have caused a renewed interest in the ideas of the Austrian School. The purpose of our Oil Report is to provide the reader with a better basis for decision-making on the back of the facts and analyses presented in this write-up. Focus on price and market If we had the chance to meet Ludwig von Mises in a Vienna…

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]]> stoeferle@oilprice.com (Ronald Stoeferle) Tue, 13 Mar 2012 19:04:50 GMT http://oilprice.com/Energy/Oil-Prices/Oil-Price-Development-from-the-Perspective-of-the-Austrian-School-of-Economics3115.html Economic Consequences of the High Oil Price http://oilprice.com/Energy/Oil-Prices/Economic-Consequences-of-the-High-Oil-Price.html The average January petrol price in the US set a new all-time-high. The high petrol price acts like an additional tax for US consumers. An increase of 10 cents per gallon translates into an additional burden of USD 14bn per year for US households. Therefore we expect the high petrol prices in the US to affect the economy (even though the extent remains unclear). Average January petrol price in the US (USD per gallon)Sources: Zerohedge, Gasbuddy, Erste Group Research In Europe, too, the higher oil price could soon trigger economic consequences.…

]]> stoeferle@oilprice.com (Ronald Stoeferle) Mon, 12 Mar 2012 22:38:51 GMT http://oilprice.com/Energy/Oil-Prices/Economic-Consequences-of-the-High-Oil-Price.html Does the Skyscraper Index Signal a Weaker Oil Price? http://oilprice.com/Energy/Oil-Prices/Does-the-Skyscraper-Index-Signal-a-Weaker-Oil-Price.html “The construction of skyscrapers that qualify as the “World’s Tallest Building” tends to coincide with major downturns in the economy” Mark Thornton The “skyscraper index” is a reliable warning signal of the end of an economic cycle. Even if the indicator, created by Andrew Lawrence and developed further by Mark Thornton, looks like a contrived correlation at first glance, it turns out to be a close reflection of the boom & bust cycle. The construction of the highest building does of course not cause…

]]> stoeferle@oilprice.com (Ronald Stoeferle) Sun, 11 Mar 2012 16:33:56 GMT http://oilprice.com/Energy/Oil-Prices/Does-the-Skyscraper-Index-Signal-a-Weaker-Oil-Price.html Crude Oil Market Analysis for the Week of March 12, 2012 http://oilprice.com/Energy/Oil-Prices/Crude-Oil-Market-Analysis-for-the-Week-of-March-12-2012.html May Crude Oil futures posted a modest gain last week with better-than-expected U.S. economic news the catalyst behind the move. The market started out weak as follow-through selling fueled by the previous week’s technical closing price reversal top attracted some mild selling pressure. By Wednesday the market had reached its low for the week after a weekly inventories report showed a smaller-than-expected increase. The Energy Information Administration said oil supplies increased by 800,000 barrels in the week ended March 2. This was below…

]]> axempire@oilprice.com (FX Empire) Sun, 11 Mar 2012 16:18:34 GMT http://oilprice.com/Energy/Oil-Prices/Crude-Oil-Market-Analysis-for-the-Week-of-March-12-2012.html Don't Factor Syrian Oil into Market Jitters http://oilprice.com/Energy/Oil-Prices/Dont-Factor-Syrian-Oil-into-Market-Jitters.html Conflicts in the Middle East and North Africa are likely dragging on broader economic recovery as oil prices move to relative highs. In Syria, any recovery in oil production will be inhibited by damage to the country's infrastructure. Foreign energy companies stopped working in Syria earlier this year because of the conflict and this week, a deputy oil minister became the highest-ranking civilian official to defect from the government. While the conflict in Syria contributes to the general unease in the global oil market, its overall energy…

]]> dg@oilprice.com (Daniel J. Graeber) Thu, 08 Mar 2012 23:01:27 GMT http://oilprice.com/Energy/Oil-Prices/Dont-Factor-Syrian-Oil-into-Market-Jitters.html Why Europe is Experiencing Higher Oil Prices than the US http://oilprice.com/Energy/Oil-Prices/Why-Europe-is-Experiencing-Higher-Oil-Prices-than-the-US.html The world is presently sharing a limited supply of oil. When oil prices rise, oil production doesn’t rise very much, if at all. Figure 1. Brent oil spot price and world oil supply (broadly defined), based on EIA data. The issues then become: Which buyers get the oil? What uses get priced out of the market? Which countries are disproportionately affected? It seems to me that this time around, Europe, and in particular the Eurozone, is the area of the world getting hit the hardest by high oil prices. Part of this has to do with the relative…

]]> tverberg@oilprice.com (Gail Tverberg) Tue, 06 Mar 2012 23:29:43 GMT http://oilprice.com/Energy/Oil-Prices/Why-Europe-is-Experiencing-Higher-Oil-Prices-than-the-US.html Crude Oil Analysis for the Week of March 5, 2012 http://oilprice.com/Energy/Oil-Prices/Crude-Oil-Analysis-for-the-Week-of-March-5-2012.html Weekly April crude oil posted a potentially bearish closing price reversal top last week. This formation typically leads to a 2 to 3 week break equal to at least 50 percent of the last rally. The key to this pattern’s success is the follow-through to the downside. A break through $104.84 will confirm the chart pattern and set up a possible break to $103.18 by the week-ending March 17. This doesn’t appear to be much, but a move through this level could set up a further decline into the 61.8 percent retracement level at $101.44. Last…

]]> axempire@oilprice.com (FX Empire) Sun, 04 Mar 2012 15:06:25 GMT http://oilprice.com/Energy/Oil-Prices/Crude-Oil-Analysis-for-the-Week-of-March-5-2012.html The Reasons for High Oil Prices http://oilprice.com/Energy/Oil-Prices/The-Reasons-for-High-Oil-Prices.html Rising oil and gasoline prices are of concern to many people today. I see three basic issues involved: 1. “Stalled out” growth in world oil supply2. Concerns about Iran3. Artificially low interest rates Stalled Out Oil Supply Leads to Five Million Barrel a Day Shortfall in 2011 In my view, the biggest contributor to high oil prices is the first one–stalled out oil supply. At this point, the interaction between oil demand and oil supply does not work in the way most people expect it would. Even if the price…

]]> tverberg@oilprice.com (Gail Tverberg) Mon, 27 Feb 2012 23:11:49 GMT http://oilprice.com/Energy/Oil-Prices/The-Reasons-for-High-Oil-Prices.html Crude Oil Analysis for the Week of February 27, 2012 http://oilprice.com/Energy/Oil-Prices/Crude-Oil-Analysis-for-the-Week-of-February-27-2012.html Crude oil surged last week to its highest level since May 2011. The close at $109.77 represents a $13.96 gain since bottoming at $95.81 on February 2. Not only did the market breakout over a downtrending Gann angle from the $114.09 top at $108.72, but it also closed on the bullish side of a steep uptrending Gann angle from the $95.81 bottom. This angle comes in at $111.81 this week which means crude oil has to rally at least $2.05 to maintain its torrid upward pace. If April crude oil begins to flatten or if upside momentum begins to slow, then…

]]> cm@oilprice.com (Commodities Mansion) Sun, 26 Feb 2012 14:48:52 GMT http://oilprice.com/Energy/Oil-Prices/Crude-Oil-Analysis-for-the-Week-of-February-27-2012.html Prices of WTI and Brent Should Realign with a Gulf Coast Pipeline http://oilprice.com/Energy/Oil-Prices/Prices-of-WTI-and-Brent-Should-Realign-with-a-Gulf-Coast-Pipeline.html The Keystone Gulf Coast Expansion Project is now entering its fourth year of regulatory review, and is currently on indefinite political hold. In the meantime, the market is figuring out other alternatives. A key demonstration of the need for better oil transportation infrastructure in the United States is the price gap between West Texas Intermediate, a light, sweet crude traded in Cushing, Oklahoma, and Brent, a similar crude from the North Sea. The Law of One Price suggests that these very similar products should sell for a very similar price,…

]]> flybiggles555@yahoo.com (James Hamilton) Thu, 23 Feb 2012 23:55:01 GMT http://oilprice.com/Energy/Oil-Prices/Prices-of-WTI-and-Brent-Should-Realign-with-a-Gulf-Coast-Pipeline.html