Tag: WTI

  • Sanctions, Shipping, and Oil Markets

    By: Adi Imsirovic , Michal Meidan

    In just over a week, the theoretical cost of taking a barrel of oil from the Gulf to Asia, in the cheapest possible way, rose by $6 per barrel. At a time when refinery margins are in single digits, this is a major blow to refinery profitability. The US administration’s decision to sanction two subsidiaries […]

  • Murban: A benchmark for the Middle East?

    By: Ahmed Mehdi , Eesha Muneeb , Adi Imsirovic , Bassam Fattouh

    The need for a new marker for East of Suez crude oil pricing has dominated debate in oil trading circles over the past several years. The latest opening salvo has been launched by Abu Dhabi National Oil Company (ADNOC), currently in the process of laying out a roadmap to launch a light crude reference marker […]

  • Contracts for Difference and the Evolution of the Brent Complex

    By: Bassam Fattouh , Adi Imsirovic

    The sharp increase in US shale production since 2011 has resulted in structural shifts in regional and global oil trade flows. In turn, this is having a major impact on oil benchmarks inside and outside the US. Brent, the major benchmark for international oil trade, is likely to be impacted the most. While the volume […]

  • An Overview of the Crude Oil Market in 2019

    By: Bassam Fattouh , Andreas Economou

    In the second half of 2018, the oil market exhibited high volatility not only in terms of price levels but also time spreads and quality spreads. After reaching highs of $81/b and $71/b in October, monthly Brent and WTI prices ended the year in December at $57/b and $49/b respectively. At the same time, time […]

  • Global Oil Markets – Current Developments and Future Prospects

    By: Bassam Fattouh

    In this presentation, given at the Bank of England, Bassam Fattouh looks at current developments in the oil market and explores some short and medium term prospects and concludes with the following observations: • It is important to be clear about causality; it is supply and demand imbalances that cause stocks to rise and for […]

  • New swings for West African crudes

    By: Bassam Fattouh , Amrita Sen

    While most recent analysis has focused on the potential impact of the US ‘tight oil’ revolution on global oil supplies and oil price levels, the impact on the shifts in trade flows and on the dynamics of price differentials has received much less attention. This is quite surprising, as the recent transformations in the US […]

  • An Anatomy of the Crude Oil Pricing System

    By: Bassam Fattouh

    The main purpose of this report is to analyse the main features of the current crude oil pricing system; to describe the structure of the main benchmarks currently used namely Brent West Texas Intermediate (WTI) and Dubai-Oman; to clearly identify the various financial layers that have emerged around these physical benchmarks; to analyse the links […]

  • An Anatomy of the Oil Pricing System

    By: Bassam Fattouh

    The current oil pricing system has now survived for almost a quarter of a century, longer than the OPEC administered system did. While some of the details have changed, the fundamentals of the current system have remained the same since the mid 1980s. In the light of the 2008-2009 price swings, the current oil pricing […]

  • Price Formation in Oil Markets: Some Lessons from 2009

    By: Bassam Fattouh

    This comment analyses the oil price dynamics in 2009 arguing that 2009 represents a remarkable year in at least two respects: it witnessed the sharpest increase in spot oil prices in decades; and in the second half of 2009 it exhibited a high degree of relative stability despite a very uncertain and volatile global economic […]

  • Reinforcing Feedbacks, Time Spreads and Oil Prices

    By: Bassam Fattouh

    While the media often focuses on the sharp swings in oil price, there have been some interesting reinforcing feedbacks unfolding in the term structure of oil prices affecting the international pricing system, financial investment, inventories and OPEC behaviour. These feedbacks are not new to the oil market, but the current environment seems to have amplified […]

  • To Cut or not to Cut: The Dilemma Facing OPEC

    By: Bassam Fattouh

    Since the early 1970s, OPEC has been central to understanding the dynamics of oil prices. With the shift to the futures market for oil price determination, OPEC has also become important in understanding the changes in the shape of the futures curve and expectations about changes in long term oil prices. At this critical juncture, […]

  • Prospects of the DME Oman Crude Oil Futures Contracts

    By: Bassam Fattouh

    In this comment, Bassam Fattouh re-assesses the prospects of DME’s Oman Crude Oil Futures Contract by focusing on three aspects: retroactive pricing, physical delivery and liquidity. He argues that in terms of providing better tools for risk management, enhancing price transparency and constituting the basis of a new benchmark, the DME’s contract has not made […]