Crude Oil Markets
Twenty years ago, crude oil prices very diligently followed crude oil inventory levels. As inventories increased, crude oil prices dutifully decreased and vice versa. That simple relationship has been strained in recent years. Crude oil prices reflect many factors including inventory levels, economic growth, and other supply and demand factors. Increasingly, crude oil prices today are following the performance of the equity markets. In addition, crude oil prices are impacted by currencies. We'll have a look at each of these market dynamics and try to put it in a rational framework.
Over the past two decades, crude oil markets have evolved considerably. No longer are producers in the energy value chain the ...