1. Production and prices

2. West Texas Intermediate

3. Run-up to Copenhagen

Quote of the Week

The Briefs

1. Production and prices

It was another volatile week with oil prices pushing $82 a barrel on Monday and then, after wild gyrations, falling $2.87 on Friday to close at $77. As usual, the dollar and outlook for the global economy were behind the moves. Much of the action centered on the release of the preliminary (or as some say “guesstimate”) third quarter US GDP numbers which were reported to show a growth of 3.5 percent. The voices of those noting that the GDP “growth” was mostly due to “cash for clunkers” and “first-time buyer” stimulus payments were lost in the rush to celebrate the end of the recession. Oil surged $2.41 a barrel after the announcement. By Friday however, the reality of falling consumer spending set in and oil fell along with the equity markets. [...]

2. West Texas Intermediate

Last week Saudi Aramco announced that it will abandon the West Texas Intermediate (WTI) benchmark and as of January will switch to the Argus Sour Crude Index for pricing oil sales to US customers. Aramco has been pricing its crude for sale to US customers on the basis of WTI since 1994. Prices to customers in Europe are based on Brent North Sea crude and for Asian customers on the average of Oman and Dubai crudes. [...]

3. Run-up to Copenhagen

Maneuvering prior to the international climate change meetings, which open in December, continued last week. In Europe, the EU announced that it had reached agreement on the Union’s willingness to contribute $74 billion a year, by 2020, to help underdeveloped countries pay for technology to reduce greenhouse gases. Agreement on how the $74 billion should be distributed among the richer and poor EU countries has yet to be achieved. [...]