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RE: Suprise-Speculators Blamed Oil Rise & Crude exceeds Gas / Crack Spread

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#6975

Charles Randall
Participant

 Here are two recent news items highlighting a repeated theme of mine (and John Crudele evidently) that speculators not the market fundamentals have been cause of both oil & gasoline prices. Greed has finally driven them over the line into exposure and destruction of oil/refining industry economics (ie Crude more than Gasoline & negative cracked spreads).
 
Maybe some folks will finally get off duffs and take action.  I would suggest oil companies cross check their own Crude Oil Trading groups to make sure the hedges have been linked to physical barrels and not just speculation……although the profits are going to tell that story themselves in shortly. 
 
 Change might come true sooner if lot refiners only bought their crude physical barrels at a value justified on fundamentals (lot lower than $10 lower the news items are suggesting) and not at a WTI “hedge protected” trading value. Since most US refineries actually use heavy crude oils deeply discounted from sweet crude index’s like WTI – it may be time to fast forward a true Sour Crude index that isn’t a delta or discount off WTI value that has no relation to the traded/exported/transported import crude they actually use.
 
Regards

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