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

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2: Paper Barrels

‘What happens in the futures markets does not stay in the futures markets...’

Testimony of Michael W. Masters, managing partner of Masters Capital Management, United States House of Representatives June 23 2008

2.1 Whose Oil Price?

Asgard, Bonny Light, Forties Blend, Louisiana Light Sweet, Premium Albian, Terra Nova, White Rose: as instantly evocative as cigarette branding, these are in fact the names of some of the 160-odd commonly recognised “benchmark” crude oils produced and traded around the world. In a roster running from Abu Bukhoosh to Zueitina, each benchmark is defined by a list of attributes that crude oil should meet if it is to be sold under that name – primarily chemical qualities such as specific gravity, ...

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