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WTI Hits $105.99, Brent Spread Disappearing
WTI crude oil prices have jumped over 14% in the last 12 days (from $92.67 to $105.99) since Egypt erupted - and no, it's not 'growth' hopes as last night's collapse in China did nothing to dent the surging social-unrest-premium. It seems, as much as Egypt, that the total collapse in the Brent-WTI spread is becoming self-feeding now - back below $2.50, its lowest in over 31 months. So between infrastructure issues in the US, technicals in the market, and Middle-Eastern unrest-premia, we are looking at the possibility of $4.10 gas in the not-too-distant future if this is anything but instantly transitory.
At these levels we should expect gas prices at the pump to top $4.10...!
Charts: Bloomberg
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I'm making stupid assumptions?!? Kettle, meet black. I stated that "I will punch anyone in the face that compalins about gas prices while filling up their 10mpg SUV", and you decided that it's none of my business. Either you're a complete daft fool, or you're one of those idiots that tries to sound smarter than they really are. Oh, and you forgot to point out how you sold your APPL shares at the peak.
OT but in the "You Can't Make This Shit Up" category (and the "Snowden will at least have a job" comedy archive):
Venezuela Forces Employment Even With Shuttered Factories"Jean Salero gets up at dawn to clock in for his daily shift at a shuttered beer factory in the Venezuelan city of Barquisimeto. After eight hours of checking valves and taking temperatures of idle machinery, he clocks out to earn his 4,700 bolivar ($746) monthly paycheck.
The former supervisor is among 220 workers who continue to draw wages at the plant that produced Brahma beer until Belgian owner Anheuser-Busch InBev NV (ABI), the world’s largest brewer, halted production four months ago.
Salero has kept his job because of a 2012 labor law that obliges companies to obtain government permission to fire anyone. The state has yet to approve a single dismissal, said Aurelio Concheso, the labor committee director at Venezuelan business chamber Fedecamaras. It’s a deterrent to investment in a country that already had the world’s most restrictive hiring and firing practices, according to rankings by the Geneva-based Global Economic Forum."
http://www.bloomberg.com/news/2013-07-10/venezuela-forces-employment-eve...
sorry, but most of you folks posting don't know what you are talking about. the price of wti isn't reflected in the pump. it was being bought cheap, shipped and sold at "brent prcies on the coasts. the oney was being made by the squid, who keep the orice down, take delivery then resell. this spread should never really have existed in the fist place much beyond transport costs.
Umm... sure thing, did you think about this long and hard?
mustve been my imagination when crude hit 150/bbl in 2008 and gas hit $4+ by me...........
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Tyler Durden wrote:
Yes. Unless oil prices decline significantly in the next month, then the average, retail price of gasoline in the USA will almost certainly breach $4.10 before mid-September. You can almost count on it.
The political consequences of such a price shall be interesting to watch.
-- Paul D. Bain
Founder, OccuypyOilSpeculators.com
PaulBain@PObox.com
===============
OT but here we go again in the GOM!
http://online.wsj.com/article/BT-CO-20130709-709362.html?mod=googlenews_wsj
They'll call this the July surprise in the history books.
Did any of you guys get the early release of the Fed minutes yet? What do your friends at the JPM and GS trading desks say? They get theirs yet?
Good thing the recovery is over, training-wheels can come off and the economy is re-running on all cylinders [/sarc] because with oil prices north of 100 a recovery seems unpossible in the first place.
I find your analysis decently kromulent, however, I suspect that if the poorest of the poor are expected to use only what is given to them (bus, gas money, work on the plantation) by their masters, the new economy may not matter for serfs. Live or die, starve or work, so long as the resources are themselves in control by the masters. The serfs can choose to show up for 'work' / slavery and drop costs somehow for the elites to manage their resources, or they can die.
Not that I approve but de-bigulating the current levels of economic freedom is likely.
WTI Monthly shows last leg up.
http://bullandbearmash.com/chart/spot-wti-oil-monthly-finishes-5-outlook...
It will be a slower process to $30 per barrel this time around.
As has been mentioned before, you will not like what the world looks like at $30/barrel, provided you are alive.
Just filled up my 1983 Goldwing. 40+mpg on the Highway and a must have in case of zombie appocolypse.
The coming Apocalypse will not have the word "zombie" in front of it.
Oil maybe. Or oil scarcity maybe.
And if you have a motor vehicle that has gasoline, you'll be targetted.
"And if you have a motor vehicle that has gasoline, you'll be targetted."
They won't bother to check what it has until you're safely dead.
undoubtedly fundamental supply - demand issues are driving price action. [/sarc.]
I keep forgetting how many dollars the Fed is printing until I see the price of oil pop. Oil is one of the last commodities left that makes a good effort at showing to all the inflationary printing shenanigans that are going on behind the scenes.
The next time you hear someone complain about the price of gas or oil, you can sit them down and show them how this is really evidence of dollar weakness and not oil strength. Maybe then they will begin to understand how the Fed and the banks steal money out of their back pockets via stealth inflation
Too many people make this error.
It's not printing that does this. Oil's super spike in 2008 was before the words Quantitative Ease were in anyone's lexicon. It was all pre printing.
Oil's price is grinding up because the joules ratio of effort required per joules outflow is exploding. There is no fix for this. Death approaches for most.
Actually that's inaccurate because manipulation, printing & fraud have been at play since before Greenspawn was at it.
You really don't understand Inflation, do you? Giving free loans to asshats that will never pay it back and driving up the average cost of the home at the behest of creating a market of home loans and second mortgages is the same as pumping money straight into the markets with QE. The name may be different and the mechanism might be a little more complex but the effect is exactly the same.
I like the sharp spike up. Another opportunity to short. Does anybody really believe the economy can support this price? Wage destruction equals demand destruction. The Banks can sell it to each other until one of them says never mind.
I share your same view, the oil is going banana and well.. like you say, seems an opportunity to short.
It is just the money printing effect getting triggered by some butterfly flapping its wings. Be thankful they are throwing you a lifeline in PMs. There has never been any possible outcome but massive inflation, except scarcity + inflation if they do price controls.
true that.
Let's see the highs tested on oil.
Gas is $1.31.9 a litre in western Canada and that is cheap. Plus another 8-10 cents per litre for premium gas. Traffic seems as busy as ever although the buses also seem more packed with even some people in suits. I have a car but I haven't fueled it this year. I imagine oil is tugged both ways price wise but up is winning. And gas is just a waste byproduct so the good stuff from oil must be under more price pressure.
Maybe we should make a pipeline or something between here and Canada? Seems like a key idea. Must be stoned not to have thought of it earlier.
OMG, what an idea! I am sure our illustrious pResident will support something Good for our country!
We could feed cheaper Canadian oil to generator plants and have a lot of the electricty back we are going to lose because of the Evil Coal our pResident is protecting us from!
We must contatct him asap!
Bullish?
No problem. A Ferrari California only costs $192,000 and there is one even cheaper in Toronto. Gas shmas.
WTI discount to Brent never made sense.
It made perfect sense given the landlocked nature of the newest NA supplies...
But the US imports 1/3 of the oil it burns. Without the US trade deficit, WTI would easily go up to Brent and maybe more.
I am all for free markets, but when the new government is set up when this current one collapses, don't you all think there should be some price controls on oil, which could be controlled by the new government?
Then we'll have shortages and lineups at the pumps. Oil can't be produced cheap anymore and the only way to reduce gasoline prices while maintaininig consumption would be government subsidies, and we all know where those lead. If anything, gasoline should be taxed to at least $10 a gallon right now to reflet its true fundamentals, and really $20 would probably be more realistic. It would destroy the economy, but that's going to happen anyways, let's get on with it while we still have some oil left. The oil age is over.
Good points. Higher prices would also create a demand by the public for alternative fuels.
"Gas is $1.31.9 a litre in western Canada and that is cheap. Plus another 8-10 cents per litre for premium gas. Traffic seems as busy as ever"
In the US lakes are packed with gasoline at over $4.00/gal. Gas would have to move a great deal higher to have an impact.
Hint, hint traders, producers, refiners and drillers.... You have a lot of room to raise prices. Maybe at $6.00/gal?
yogi, it's not the effects on personal individual consumption that has them worried.
The single largest consumer of fuel is government followed by large corporates.
How do they incorporate a 10%, 20%, 30%, 40%, 50% higher fuel expense into their already stretched budgets? They can't.
The consumption is down because government and corporates are parking their vehicles, planes, tanks, trucks and so on.
"The consumption is down because government and corporates are parking their vehicles, planes, tanks, trucks and so on."
Governmen no, corporations yes, but it's all wasted just the same. And consumption elsewhere in the world is up, up, and away.
A spike in Oil always precedes recessions. In this case ME war as well. We could easily see 150 per brl within weeks.
"we are looking at the possibility of $4.10 gas in the not-too-distant future"
Move the decimal point one place to the right.
A WTI zoom driven by a U.S. shale oil boom. Of wall street, by wall street, for wall street.
With Jets being sent by the US and the Russia as well as China we can see the war escalation occur.
What better way to divert public attention to nationalism for both the US and China.
The defense contractors are licking their chops.
2007/2008 FYI, Oil above 110 and US $ Dollar above 86, " Equities " shaken/stirred..
Ponzi scheme limits
Print, repeat