• 5 minutes Desperate Call or... Erdogan Says Turkey Will Boycott U.S. Electronics
  • 11 minutes Saudi Fund Wants to Take Tesla Private?
  • 17 minutes Starvation, horror in Venezuela
  • 7 mins WTI @ 67.50, charts show $62.50 next
  • 9 hours Newspaper Editorials Across U.S. Rebuke Trump For Attacks On Press
  • 10 hours Mike Shellman's musings on "Cartoon of the Week"
  • 5 hours Permian already crested the productivity bell curve - downward now to Tier 2 geological locations
  • 15 hours Venezuela set to raise gasoline prices to international levels.
  • 5 hours WTI @ 69.33 headed for $70s - $80s end of August
  • 9 hours Batteries Could Be a Small Dotcom-Style Bubble
  • 15 hours Scottish Battery ‘Breakthrough’ Could Charge Electric Cars In Seconds
  • 22 hours Renewable Energy Could "Effectively Be Free" by 2030
  • 21 hours Corporations Are Buying More Renewables Than Ever
  • 11 hours Don't Expect Too Much: Despite a Soaring Economy, America's Annual Pay Increase Isn't Budging
  • 1 day Again Google: Brazil May Probe Google Over Its Cell Phone System
  • 12 hours France Will Close All Coal Fired Power Stations By 2021
Alt Text

5 Big Gainers In Oil & Gas This Week

Energy stocks have been among…

Alt Text

World Bank To Cut Off Oil & Gas Funding

In accordance with the Paris…

Alt Text

Clean Energy Stocks Outperform Oil And Gas

Green energy stocks saw tremendous…

Matt Smith

Matt Smith

Taking a voyage across the world of energy with ClipperData’s Director of Commodity Research. Follow on Twitter @ClipperData, @mattvsmith01

More Info

Trending Discussions

Someone is Always Making Money Somewhere

Someone is Always Making Money Somewhere

Regardless of whether a market is moving up or down, there is always someone making money somewhere. There are various examples every day – be it a billionaire selling a stock short (i.e., Herbalife) or a company selling a meal short on ingredients (i.e., horsemeat economics). Some methods are legitimate, and some are not. But one thing is for sure…energy markets are by no means immune to such collusion.

The natural gas market is coming under increased scrutiny, as price movement ahead of the main event of the week – the weekly storage report – appears to be being manipulated by high-frequency trading (HFT). The below illustration from last weekend’s Wall Street Journal highlights how this is done, causing regulators now to conduct ‘more than just the routine oversight and surveillance’.

Natural Gas Future Price

High-frequency trading is nothing new to financial markets, but it is new to the natural gas market. It has also spawned some wonderfully inventive names to describe the pre-storage report shenanigans. The best term by far has to be ‘banging the beehive’, which is where a flood of orders is sent to trigger a huge price swing immediately before the data is released.

Related article: Silver Prices Remain in a Consolidation Mood

Other strategies include ‘spoofing’ and the ‘Boston zapper’. Regardless of how comical these names are, however, this creation of ‘synthetic momentum’ is market manipulation and is being investigated accordingly.

Next up, we take a look at gasoline prices, which have now risen for a wallet-whooping 34 consecutive days, according to the AAA. There are a number of reasons to explain why gasoline prices are now at a record for the time of year, with the omission of the one which makes most logical sense…higher demand.

US Liquid Fuels Consumption

The rise is due to an amalgam of reasons, including elevated oil prices, refinery repairs, seasonal maintenance, and the impending switch to the more expensive summer blend. There is further bad news ahead, as prices will likely continue to show seasonal strength to peak in the coming months, ahead of higher demand from the impending arrival of driving season in May:

Related article: This Week in Energy - Billionaires Secretly Funding Climate Denial Think Tanks

AAA Retail Gasoline Price

So who is making money here?  The breakdown for the price of gasoline is something like this: 10% for refining costs, 14% in federal and state taxes, 8% for distribution and marketing, with the rest made up by the price of crude oil (68%). Gas stations earn less than $0.05 per gallon.

Meanwhile, higher energy costs continue to increasingly impact consumer spending. Gasoline last year equated to a record $2,900 of spending per US household, or just under 4% of income before taxes. Rising global demand for oil may be the ultimate culprit for higher gasoline prices, and given that the US is the largest global consumer, leaves the US consumer as the ultimate victim.

By. Matt Smith




Back to homepage

Trending Discussions


Leave a comment

Leave a comment




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