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Thats WTI, Brent is still much higher.
by coldcode 6y ago
Thats WTI, Brent is still much higher.
- Mikeb85 6y agoWTI is what matters most to North American producers.
- chrisfinazzo 6y agoIs that correlated to the price of gas - if it ever was? I realize the above question is naive, but it's clear that the Russians and the Saudis having a pissing match over supply just as demand dries up (because COVID) has caused prices to collapse. In some places, gas is under $1/gallon.[1] [1]: https://www.cnet.com/roadshow/news/gas-prices-average-drop-kentucky-station-us/ https://www.cnet.com/roadshow/news/gas-prices-average-drop-k...
- Mikeb85 6y agoYeah gas prices mostly correlate to oil prices but also to demand for gasoline (hence the price always going up in the summer).
- chrisfinazzo 6y agoI meant this more in the sense of do they look at a specific benchmark to derive how prices are set. E.g, If gas is based on WTI, then Brent can be up or down without affecting it much - Prepared to be wrong. While they aren't in lockstep, it looks like they play off each other most of the time. As you say, seasonality has a role and demand for heating oil v gas depends on the time of the year.
- Mikeb85 6y agoGasoline is one of many products produced from crude (others include kerosene, diesel, heating oil, butane, propane, plastics, etc...). You can also get a different mix of products depending on the grade of oil and refining technique, so gasoline has its own supply/demand dynamics which partially intersects with demand curves for the other products while crude is merely the input. So cheap crude does allow more room to lower the price of gasoline and cheap crude is often linked to lower demand, however they're not in lockstep due to the many other factors.
- Danieru 6y agoBrent would not be impacted by storage in America, since Brent is a product of the oilfields near the old Brent oilfield in north Europe. Which brings up the topic of oil prices: there are many. Every blend, every location, has its own price. In fact the same oil can be sold at different prices if the seller so chooses. Of note Saudis have reportadly raised the price they offer americans as part of the deal, while lowering the price to asia. Which leads to the saying:"In equity the algorithms are a secret and the prices are known, in oil the prices are a secret and the algorithms are public." News can only talk about WTI or Brent, but exact prices at each market depend upon situations.
- SilasX 6y ago>Which brings up the topic of oil prices: there are many. Every blend, every location, has its own price. In fact the same oil can be sold at different prices if the seller so chooses. True but largely irrelevant. WTI is a widely-cited benchmark because all those oil prices are highly correlated and so it's a good general measure.
- stevesimmons 6y agoHighly correlated, in normal market conditions!
- SilasX 6y agoAnd most abnormal ones. Even now they're correlated. And when e.g. one region has abnormalities, it doesn't really affect the purpose most people use this measure for.