Taking Back Control Of Crude Markets

Business, China, Economics, US

Goldman Sachs is talking about crude oil at $85 a barrel by the end of the year.

Sound familiar? Not quite forecasts of $200 a barrel, but is there a danger of repeating the mistake that the James A Baker III Institute on Public Policy claims was made in 2008?

In a new report, the institute claims that in the spring of that year financial speculators – out of touch with physical oil storage – missed the amount of floating storage that contributed to the subsequent collapse.


Speculators don’t care about the effect on the real economy, only in making money their money and getting out at the right time.

“In 2007-08 dramatically rising oil prices fed US indebtedness. This led to an even weaker dollar, driving oil prices even higher,” write the authors of the report.

Index funds linked to the value of the greenback have increased their activity on the Nymex fourfold since January 2006, they add.

Non-commercial players as a whole have been lead indicators of pricing – again from January 2006 – thanks to market liberalisation introduced in 2000.

So do we need governments to use strategic petroleum reserves, as did President Clinton in the 1990s, and the use of spare capacity by producers to take the power away from the speculators?


A New Series: It's A Mad World


Source of Picture: pupillageandhowtogetit.wordpress.com And now for something co...

Learn more

"Steal a little and they throw you in jail.....


Source of picture: rateyourmusic.com …steal a lot and they make you a King...

Learn more
More posts
Global polyethylene oversupply, the highest in 19 years, hasn’t gone away

By John Richardson BRENT crude futures surged by 80% during the second quarter and enjoyed their bes...

China could be in complete polypropylene self-sufficiency by 2022

By John Richardson SORRY to labour the point but this comes from a genuine concern for the readers o...

Asian polyethylene price recovery faces multiple challenges

By John Richardson THERE are reports of significant cuts in Middle East polyethylene (PE) operating ...

China’s long-term ambition for paraxylene self-sufficiency seems close to being realised

On Friday, I examined how China’s paraxylene (PX) net imports could fall to as little 8m tonne...

China’s big declines in 2020 PX and PP imports: the impact on its major trading partners

By John Richardson CHINA’S refineries and petrochemicals plants came roaring back to almost fu...

Paraxylene demand collapses as higher China production threatens 6m tonne fall in imports

By John Richardson DON’T SAY I didn’t tell you that a decline in stock markets would happen. The...

Coronavirus will severely damage the developing world unless we take the right steps

By John Richardson IT IS a fantastic achievement. “Over the last 25 years, more than a billion peo...

Main Street versus Wall Street and the crisis in the developing world

By John Richardson RISING equity and oil markets do not necessarily point to a V-shaped recovery. I ...


Market Intelligence

ICIS provides market intelligence that help businesses in the energy, petrochemical and fertilizer industries.

Learn more


Across the globe, ICIS consultants provide detailed analysis and forecasting for the petrochemical, energy and fertilizer markets.

Learn more

Specialist Services

Find out more about how our specialist consulting services, events, conferences and training courses can help your teams.

Learn more

ICIS Insight

From our news service to our thought-leadership content, ICIS experts bring you the latest news and insight, when you need it.

Learn more

Uncover exclusive industry upates from ICIS

Interested to uncover more articles related to this topic? Explore additional news, insights and intelligence, tailored to the markets you are interested in by accessing exclusive content from ICIS.com