Carollo Understanding Oil Prices

A Guide to What Drives the Price of Oil in Today's Markets
2. Auflage 2011
ISBN: 978-1-119-96290-8
Verlag: John Wiley & Sons
Format: EPUB
Kopierschutz: Adobe DRM (»Systemvoraussetzungen)

E-Book, Englisch, 224 Seiten, E-Book

Reihe: Wiley Finance Series

It's a fair bet that most of what you think you know aboutoil prices is wrong. Despite the massive price fluctuations of thepast decade, the received wisdom on the subject has remainedfundamentally unchanged since the 1970s. When asked, most people- including politicians, financial analysts and pundits- will respond with a tired litany of reasons ranging fromincreased Chinese and Indian competition for diminishing resourcesand tensions in the Middle East, to manipulation by OPEC andexorbitant petrol taxes in the EU. Yet the facts belie theseexplanations. For instance, what really happened in late 2008 when,in just a few weeks, oil prices plummeted from $144 dollars to $37dollars a barrel? Did Chinese and Indian demand suddenly dry up?Did Middle East conflicts magically resolve themselves? Did OPECflood the market with crude? In each case the answer is adefinitive no - quite the opposite in fact.
Industry expert Salvatore Carollo explains that the truth behindtoday's increasingly volatile oil market is that over thepast two decades oil prices have come untethered from all classicalnotions of supply and demand and have transcended anycountry's, consortium's, cartel's, or corporateentity's powers to control them. At play is a subtler, morecomplex game than most analysts realise (or are unwilling to admitto), a very dangerous game involving runaway financial speculation,self-defeating government policymaking and a concerteddisinvestment in refinery capacity among the oil majors.
In Understanding Oil Prices Carollo identifies the keyplayers in this dangerous game, exploring their competing interestsand motivations, their moves and countermoves. Beginning withthe1976 oil embargo and moving through the 1986 Chernobyl incident,the implementation of the US Clean Air Act Amendments of 1990, andthe precipitous expansion of the oil futures market since the turnof the century, he traces the vast structural changes which haveoccurred within the oil industry over the past four decades,identifying their economic, social and geopolitical drivers, andanalysing their fallout in the global economy. He explores the oilindustry's decision to scale down refining capacity in theface of increasing demand and the effects of global shortages ofpetrol, diesel, jet fuel, fuel oil, chemical feedstocks, lubricantsand other essential finished products, and describes how, beginningin the year 2000, the oil futures market detached itself almostcompletely from the crude market, leading to the assetization ofoil, and the crippling impact reckless speculation in oil futureshas had on the global economy. Finally he proposes new, moresophisticated models that economists and financial analysts can useto make sense of today's oil market, while offering industryleaders and government policymakers prescriptions for stabilisingthe market to ensure a relatively steady flow of affordableoil.
A concise, authoritative guide to understanding the complex, oftmisunderstood oil markets, Understanding Oil Prices is animportant resource for energy market participants, commoditytraders and investors, as well as business journalists andgovernment policymakers alike.

Autoren/Hrsg.

Carollo, Salvatore

Inhaltsverzeichnis

Foreword xiii
Preface xv
Quick Reference Guide xix
List of Figures xxiii
List of Tables xxvii
List of Boxes xxix
1 TheWorld Crude Oil Paradoxes 1
2 The Market Events from 2008 to 2011 7
World Energy Policy 8
The Financial Crisis and the Oil Market 10
Fundamentals or Financial Speculation? 17
Demand/Supply of Gasoline and Gasoil 21
WTI - Brent Differential 24
3 Evolution of the Price of Crude Oil from the 1960s up to1999 29
1960-1980: The Oil Monopoly and the Two Crises in the1970s 30
The 1980s: The Gradual Disappearance of OPEC 33
The Price War 35
1985-2000: From the Introduction of Brent as anInternational Benchmark to the Clean Air Act 37
The Suicide of OPEC 40
The Start of the Free Market 41
The Consequences of the Environmental Turnaround 44
4 Changes in the Market for Automotive Fuels 45
Evolution of Environmental Demand 45
Gasoline and its Components 50
Reforming 51
Cracking 52
Alkylation 53
Isomerization 53
Refiners Walk the Tightrope 53
The Fiscal Policy of the Industrialized Countries RegardingFuels 55
5 World Oil Flow 63
Transformations in the Downstream 66
World Supply Structure 70
6 The Classical Model of the International Oil Market73
7 The Short-term Model of the International Oil Market81
8 The Brent Market 89
The Sale and Purchase Contract 90
The Forward Market for Brent (15 day Brent Contract) 94
The IPE Brent Market 100
The Divorce Between Oil Price and Oil 102
9 Principal Uses of the Forward and Futures Markets105
Tax Spinning 105
Benchmarking 105
Hedging the Price Risks 106
Speculations on Operational Flexibilities at Loading 114
Market Structure: Contango and Backwardation 117
Procedures at the Loading Terminals 119
10 Problems of the Brent Forward Market 123
11 The European Refinery Crisis 131
12 Conclusions:We are Ourselves OPEC 155
Bibliography 163
Index 165

Über Autor(innen)

SALVATORE CAROLLO graduated in engineering from the University of Palermo, where he also served as a lecturer and researcher. In 1975 he began working at eni; both in Italy and abroad where he was active in various sectors of the petroleum downstream, refining, market research, supply and trading of crude oil. Since 1995 he has been based first in Amsterdam and then in London as the manager of the Upstream Marketing Department, where he is responsible for the commercial relations with several producing countries and eni partners in various joint ventures. Within this area he provides support to eni corporate university, through teaching activities at the Mater MEDEA and organising the annual Oil Market and Commercialization of Crude Oil seminar. He is often called in as an expert by various institutions in the oil sector to provide his own analysis on the dynamics of oil prices.