Our good friends in OPEC have finally accomplished the hard fought task of pushing down the price of Brent crude to parity with WTI.
This, of course, is bearish for domestic refiners and even worse for producers, as the cheap price of Brent lures our refiners into importing Brent, as opposed to buying domestically.
Market “experts” feel this relationship will resolve itself, once WTI supply builds at Cushing, OK, forcing WTI lower. What these experts aren’t concerned about is the pervasive and concerted effort of foreign producers to break the backs of U.S. producers, specifically in the shales.
The only way to accomplish a glut in WTI supplies is for our refiners to opt for Saudi oil over domestic.
How very joyous.
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excellent. long oil, NKE, GILD, TWTR. happy GMCR holiday wishes for all shorts
‘panic’-‘buying’
Because money managers must have about 3 hours ago seen the major powerful world growth available to them
The spread was expected to shrink as a result of Congress ending the oil export ban so not shocking.
In general, oil from different countries (or even different parts of a big country like US) are different. Refineries are built to use a specific type of oil (for example only Saudi oil). Shifting to a new producer requires technical modifications that may be more expensive than the savings on half a dollar price difference.
Dr. Fly, would you say Obama is no longer an oil man?
http://ibankcoin.com/news/2012/06/06/make-no-mistake-about-it-obama-is-an-oil-man/