Anyone else notice Brent Crude is up 2.2% this afternoon?

[Mega]

Its $102 +.......I thought it was coming DOWN?
Mike

[globaleconomicollaps]

Re: Anyone else notice Brent Crude is up 2.2% this afternoon?

Its $102 +.......I thought it was coming DOWN?
Mike

I like the huge difference in price between WTI cushing and Brent. you can now make $15 just moving tankers from texas to aberdeen. If I had a zillion bucks I would make 2 zillion from just moving oil. This kind of spread is not supposed to happen.

[c1ue]

Re: Anyone else notice Brent Crude is up 2.2% this afternoon?

I like the huge difference in price between WTI cushing and Brent. you can now make $15 just moving tankers from texas to aberdeen. If I had a zillion bucks I would make 2 zillion from just moving oil. This kind of spread is not supposed to happen.

Don't tell me you still believe in the 'efficient' markets theory?

[xPat]

Re: Anyone else notice Brent Crude is up 2.2% this afternoon?

I like the huge difference in price between WTI cushing and Brent. you can now make $15 just moving tankers from texas to aberdeen. If I had a zillion bucks I would make 2 zillion from just moving oil. This kind of spread is not supposed to happen.

My understanding is that the reason the spread IS happening is that you can't really put on the tanker arb trade you describe. Apparently there is a legal obstacle that prevents one from taking delivery of WTIC and shipping it overseas to deliver against brent. This is hearsay - I would love to confirm (with a cite to an actual statute) or authoritatively deny this statement, but have not as yet been able to. But the spread is now so wide that the fact it is so wide unto itself almost proves that the arb trade cannot be transacted without some kind of impediment.

xPat

[dcarrigg]

Re: Anyone else notice Brent Crude is up 2.2% this afternoon?

My understanding is that the reason the spread IS happening is that you can't really put on the tanker arb trade you describe. Apparently there is a legal obstacle that prevents one from taking delivery of WTIC and shipping it overseas to deliver against brent. This is hearsay - I would love to confirm (with a cite to an actual statute) or authoritatively deny this statement, but have not as yet been able to. But the spread is now so wide that the fact it is so wide unto itself almost proves that the arb trade cannot be transacted without some kind of impediment.

xPat

I don't know that there's an impediment to moving this physically (other than the operating cost of doing so), but one can trade on the spread. Here's an article from last month advising people to do so (be a little weary - he's doing bell-curve math with his advice).

http://seekingalpha.com/article/2494...ude-oil-prices

Theoretically, when a spread like this happens, there would be a greater 'surplus' inventory in Cushing, OK than Brent, UK. Orders should then move to Brent for the higher price and it should even out. That being said, read C1ue's post above.