From Business Insider (archived):
World oil prices are controlled by the amount of crude oil stored
at Cushing, Oklahoma. That’s because Cushing is the pricing point for
WTI (West Texas Intermediate) oil prices, the most-traded oil futures
contract in the world.
WTI and Brent oil prices have good negative correlation with the
volume of crude oil stored at Cushing. Comparative inventory, the
present volume of oil compared with the 5-year average, and oil-price
volatility, the rate at which the price of oil moves up and down, are
shown in Figure 1.
OilPrice.com
Figure 1. Oil price, weekly price volatility and Cushing stocks. Source: EIA & Labyrinth Consulting Services, Inc.
From the beginning of 2014 until the end of July, comparative
inventory fell and world oil prices were high averaging more than $100
per barrel. From August to the time of the November 28 OPEC meeting,
Cushing inventories rose and oil fell below $70. OPEC’s decision not to
cut production caused a spike in volatility and prices dropped to $46
per barrel by the end of January 2015.
Prices rose in February based on hope that falling rig counts would
bring declining U.S. production. Rising Cushing inventories brought
markets back to reality and they fell again in March (Figures 1 and 2).
OilPrice.com
Figure 2. WTI daily oil-price volatility, Cushing comparative
inventory and world event time line, 2014-2016. Source: EIA &
Labyrinth Consulting Services, Inc.
Cushing storage fell from mid-April to mid-June 2015 and oil prices
rallied to $60 per barrel. Concerns about China’s economic growth and
the lifting of sanctions on Iran added to flattening Cushing inventories
and oil fell to near $38 per barrel by mid-August.
Much, much more at the link.
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.