What factors determine the price of crude? | TigerDroppings.com

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ClydeFrog
Oklahoma Fan
Kansas
Member since Jul 2012
3007 posts

What factors determine the price of crude?



There's a fair bit of volatility and the market seems highly complex. I'd like a discussion here about the factors or just recommended articles you might know of.

Of course there's traditional supply and demand factors as with any industry, there's government regulation (or just he fear of it), accidents like Deepwater Horizon cause spikes etc. How much role do OPEC nations really have in determining the price?

I guess this is the time when I say that I'll hangup and listen.







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CQQ
New Orleans Saints Fan
LC
Member since Feb 2006
11580 posts

re: What factors determine the price of crude?


I'm curious to read this discussion as well





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raw dog
LSU Fan
Baton Rouge
Member since Nov 2011
327 posts

re: What factors determine the price of crude?


OPEC countries used to have a lot more influence. They still hold a great deal of reserves, but with things like shale oil happening and the U.S. becoming a net exporter, OPEC's influence has been lessened. I will add that over the past couple years there has been a gigantic spread between WTI and Brent due to stranded oil in places like the Bakken. That spread has really tightened up as of late due to increased infrastrucure being developed all across North America. Transportation and infrastructure has a strong influence.


This post was edited on 8/30 at 2:12 pm


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ClydeFrog
Oklahoma Fan
Kansas
Member since Jul 2012
3007 posts

re: What factors determine the price of crude?


quote:

I will add that over the past couple years there has been a gigantic spread between WTI and Brent due to stranded oil in places like the Bakken.


Can you expand on that? When you say stranded oil, are you talking about the Bakken region blowing up as we realized reserves were sky high but then estimations came back down when those reserves were harder to recover?


Found some interesting graphs:













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C
LSU Fan
The Woodlands, TX
Member since Dec 2007
21813 posts
 Online 

re: What factors determine the price of crude?


quote:

When you say stranded oil,


I think he's talking about places that don't have the infrastructure to bring the oil to the world market very easily (lack of pipelines to distribute)






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acgeaux129
USA Fan
We are BR
Member since Sep 2007
15011 posts

re: What factors determine the price of crude?


go read up about what happened with Brent and WTI this past summer when they had severe flooding in Canada. pretty interesting and illuminating IMO.





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ClydeFrog
Oklahoma Fan
Kansas
Member since Jul 2012
3007 posts

re: What factors determine the price of crude?


quote:

go read up about what happened with Brent and WTI this past summer when they had severe flooding in Canada.



Will do, thanks for the recommendation.






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elyK<3
UNC Asheville Fan
Member since Aug 2013
34 posts

re: What factors determine the price of crude?


aint for sure. but i do know that permian trust has royally fricked me.

i'm gonna get a few more quarterly distributions then bail on energy forever.






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HurricaneDunc
Bowling Green Fan
Houston
Member since Nov 2008
9498 posts

re: What factors determine the price of crude?


Short term price is driven by demand (summer driving season in the U.S.) and supply (Syria) expectations.

Long term price is driven by actual supply (increased oil production in the U.S.) and demand (China GDP, etc)

Eta: to be more concise, it's supply and demand and expectations of both supply and demand.



This post was edited on 9/1 at 1:56 pm


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Athanatos
Vanderbilt Fan
Baton Rouge
Member since Sep 2010
6499 posts
 Online 

re: What factors determine the price of crude?


Supply and demand, both physical and situational read-though impacts.





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