Footnote...
Did you know that it's actually the US gasoline shortage that's driving up the price of crude oil --and not the other way around??? That's the textbook definition of a monopsony. Clue:
International crude prices shoot up on concern over US shortage
REUTERS
LONDON, APRIL 30 [2004]: International oil prices hit fresh 3-1/2 year peaks on Friday led by an all time high price for US gasoline, a market haunted by fears of a shortage in the period of peak summer demand.
London's Brent crude stood at $34.85, up 47 cents, hitting a session high at $35.00, its highest since October 2000. US light crude gained 47 cents to $37.78 a barrel US gasoline hit a fresh all-time peak of $1.2510 a gallon on Friday.
"Gasoline is relentless in the face of weakening fundamentals across the rest of the crude complex," Josh Sadler, energy analyst with Societe Generale, said in a report.
"Current (US gasoline) stock levels need to increase at least five percent by the end of May to alleviate the continued upward price pressure," he said. Further ahead, Sadler said tightening credit in China could slow down its sizzling economy and erode its soaring demand for oil.
China this week ordered some smaller banks to stop lending for several days until May 1, when the week-long Labour Day holiday begins, in its latest bid to clamp down on easy credit.
Chinese Premier Wen Jiabao told Reuters this week Beijing was committed to forceful measures to cool its dangerously fast-growing economy. But that remained a backdrop to the US Gasoline picture, said Tony Nunan, risk management manager at Mitsubishi Corp.
"The market is so focused on the US Gasoline situation that China's news does little to check the fact that growing demand is still an underlying bullish factor," Nunan said.
The International Energy Agency (IEA) on Thursday urged OPEC to boost production limits at their June meeting to help top up world oil inventories, but cartel-member Venezuela said there were no plans to do so.
"That is not planned," Venezuelan Energy Minister Rafael Ramirez said on Thursday, "We have been cautious. We did one cut, and we will continue to evaluate what measures we will take to defend prices."
indianexpress.com |
