• 2 minutes Rational analysis of CV19 from Harvard Medical School
  • 4 minutes While U.S. Pipelines Are Under Siege, China Streamlines Its Oil and Gas Network
  • 7 minutes Renewables Overtake Coal, But Lag Far Behind Oil And Natural Gas
  • 2 hours Joe Biden the "Archie Bunker" of the left selects Kamala Harris for VP . . . . . . Does she help the campaign ?
  • 9 hours Trump Hands Putin Major Geopolitical Victory
  • 4 hours Tesla Begins Construction Of World’s Largest Energy Storage Facility
  • 2 hours America Could Go Fully Electric Right Now
  • 4 hours Those Nasty White People and Camping Racism
  • 1 day China wields coronavirus to nationalize American-owned carmaker
  • 3 hours Will any journalist have the balls to ask Kamala if she supports Wall Street "Carried Interest" Tax Loophole
  • 1 day COVID&life and Vicious Circle: "Working From Home Is Not Panacea For Virus"
  • 2 days Open letter from Politico about US-russian relations
  • 5 hours The Truth about Chinese and Indian Engineering
  • 14 hours Brent above $45. Holding breath for $50??
  • 24 hours Oil Tanker Runs Aground in Mauritius - Oil Spill
  • 2 days Trump is turning USA into a 3rd world dictatorship
  • 3 days US will pay for companies to bring supply chains home from China: Kudlow - COVID-19 has highlighted the problem of relying too heavily on one country for production
Dan Dicker

Dan Dicker

Dan Dicker is a 25 year veteran of the New York Mercantile Exchange where he traded crude oil, natural gas, unleaded gasoline and heating oil…

More Info

Why Oil Prices That “Should” Be Going Higher Are Going Lower

The world has changed.  Even two years ago, with a war going on by proxy between Russia and Ukraine, we'd have seen a ten dollar rally in the price of crude, not prices below $97, like we're seeing today.  Add to that the Iraq crisis in the North, the continuing Syrian conflict, the destabilization in the oil producing countries of Libya and Egypt and you'd have been shocked - at least in 2011 - to see prices go decisively under $100 a barrel and act badly there.  What's going on here?

One long-term trend in the oil market and one very short-term trend have made the difference between a price that 'should' be higher, but is in fact going lower.  We need to really understand those changes to track where oil prices will go next and where those underlying oil stocks are headed.

Let's take the long-term trend first.  For the years from 2003 until just about a year ago, the oil markets were dominated by trade that was mediated by the big investment banks, particularly Morgan Stanley, Goldman Sachs and JP Morgan.  Those banks, besides having their own proprietary capital in the forwards and futures markets also developed an army of participants on both sides of the trade, both commercial players looking for risk management of oil but particularly speculative players, both in the form of passive investment and new commodity based hedge funds.

But the banks, and particularly these largest three have abandoned the oil market, selling…




Oilprice - The No. 1 Source for Oil & Energy News