Oil 101: A Great Holiday Gift

An appropriate gift for all members of the family.

What would be a great gift this holiday season? Oil 101. Order here in the US and internationally and here in Europe (price in the UK has been reduced by 5 pounds over the past week to reflect the strength of the GBP relative to US Dollars). I am mentioning it today as if you need it before the holidays then you may need to order it soon. Thanks!

OPEC and the Consumer: BFF?

Which one in the consumer?

Today the oil market (NYMEX WTI crude) traded above US$70 per barrel and closed at a high for 2009. If you read this blog you will have been aware of the reasons for this trend since the turn at US$35 per barrel oil. Fundamental oil bulls have been lonely. Total global inventories are falling. OPEC members have removed more oil supplied than demand has fallen.

US$70-US$80 is the sweet spot at which OPEC and the consumer have declared they would both be comfortable for now given the nascent state of economic recovery. OPEC (read: Saudis) know that they can't open the spigot yet. They need to get prices up to US$90 to allow for some slippage. OPEC members know that consumers haven't got the cash to pay the high prices from 2008 and so members are unlikely to allow prices back above US$100 without finding themselves on the receiving end of some serious net consuming country political pressure.

Let the Dog Days of Summer Begin

A pal of mine

US Memorial Day, which is the last Monday of May each year (next Monday, May 25 this year), is the start of US summer driving season. School's out, the weather is good and everyone takes their vacation. With gasoline ($2.30/gal) a lot less expensive than this time last year ($3.20/gal), driving is expected to be higher than last year. Seasonality of all types is discussed in Oil 101.

(Source: DOT and Oil 101 Page 285 Fig 13-2)