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Petromania: Black gold, paper barrels and oil price bubbles by Daniel O'Sullivan

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6: Petromania Redux

‘Like the toxic debt of the banks, this is a very esoteric subject. About a billion barrels per day are traded in crude futures on Nymex and ICE for WTI and Brent. A billion barrels. Then we have the options, and then we have the OTC market – which could be another billion barrels, but quite a lot of that will be covered by the swaps writers on the futures market. So avoiding double counting, we could take maybe 1.2-1.3bn barrels as a round number – a vast number. And this is the point I keep making, I keep saying here is a market that is fifteen times the actual crude market – and people just nod their heads and then they carry on talking about fundamentals.’

Leo Drollas, chief economist of the Centre for Global Energy ...

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