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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: Sam who wrote (156567)	9/7/2011 9:01:15 AM
From: Bearcatbob	2 Recommendations Respond to of 206089

What this tells us is how massively busted the oil markets have become -- if oil priced in the U.S. can come entirely unhinged from oil priced in Europe, especially two grades that are physically so similar, what does that say about the price that "oil" is trading for anywhere? Mr. Cricket has posted many times the price of Louisiana Sweet crude on the Gulf Coast. It very closely tracks Brent. To say oil priced in the US is completely unhinged is IMO blatantly false. I would like to no more about the author and what his other agendas are. Ultimately oil is a fungible commodity with transportation being IMO a key determinate in local pricing. Look at natural gas - the prices in the US are completely unhinged from world natural gas prices - why? - transportation. Bob

To: Sam who wrote (156567)	9/7/2011 12:59:54 PM
From: upanddown	3 Recommendations Respond to of 206089

Sam I'm surprised this guy treats the WTI-Brent differential as due entirely to financial factors. There is also a physical problem here. Too much volume coming into Cushing and not enough pipeline capacity to transport it to refineries. The big production increases in the Bakken and the Canadian oil sands combined with the stalled Keystone XL project have combined to create a real bottleneck in Cushing, which is really just a pipeline hub with a lot of local storage facilities and the delivery point for WTI contracts. No E&P wants to sell their production at WTI prices which are $25+ below world prices so they are all looking for ways to get around Cushing like trucking or rail. I'm also surprised that one of the exchanges has not tried to develop a crude contract that is more reflective of real US crude prices since WTI is simply busted. As far as I can can tell, average US crude prices are well above $100 and close to Brent. That is why gas prices have not come down much. bloomberg.com bloomberg.com bloomberg.com commodityonline.com John