The end is near, It's time to despair, Crude oil is becoming cheaper, And it isn't fair.
While most of the world is complaining about rising oil prices, it is weird to find someone complaining about falling oil prices, but here I am, an out - of - work petroleum engineer. True, I'm still completing my bachelor's degree, but we can poke logic shaped holes in my arguments later.
When crude prices fall, oil companies make less profit and when they make less profit, they hire less students to work for them (see, it makes sense now, doesn't it!). There are three main reasons for the falling of crude prices right now:-
1. Spain files bankruptcy. They may have won the world cup (football that is for all my countrymen scratching their heads), but they have no money left to celebrate their triumph. Oh well, should have just let Germany have it after all.
2. The New French President. Ok, this one I don't understand. France is getting a new president, not only because of their rule of only 2 consecutive terms, but also because everyone becoming fed up of Mr. Sarkozy's flamboyant expenditure. With the new French president likely to be Mr. Francois Hollande, it is uncertain what policies he will follow. Even though he is part of the socialist party, he is opposed to the current trend of austerity gripping Europe. The uncertainty coupled with his opposition to the sound principle of austerity in the face of bankruptcy is probably the reason why no one wants to bank on French petroleum further devaluing brent crude.
3. U.S Job Scenario. The U.S rate of job creation has been far short as compared to predictions leading to destabilizing their economy. Being an oil economy, it is draining the value of American crude (WTI and NYMEX being affected here).
As crude oil invariably varies from one well to another, some standards have been set up in order to facilitate crude oil trading in mercantile exchanges.
Brent Crude -> European standard derived from the North Sea. Light crude, not too sour.
WTI -> 'West Texas Intermediate'. Average of many sampled wells of Texas. Very light, not at all sour.
NYMEX -> New York MErcantile EXchange. A synthetic standard created for trading (as the name makes it obviously clear) on the New York Mercantile Exchange. Very light, not at all sour.
There are many other standards besides. For example, OPEC countries have their own for internal trade, but as a whole when it comes to international deals, these three are the ones most commonly referred to.
While most of the world is complaining about rising oil prices, it is weird to find someone complaining about falling oil prices, but here I am, an out - of - work petroleum engineer. True, I'm still completing my bachelor's degree, but we can poke logic shaped holes in my arguments later.
When crude prices fall, oil companies make less profit and when they make less profit, they hire less students to work for them (see, it makes sense now, doesn't it!). There are three main reasons for the falling of crude prices right now:-
1. Spain files bankruptcy. They may have won the world cup (football that is for all my countrymen scratching their heads), but they have no money left to celebrate their triumph. Oh well, should have just let Germany have it after all.
2. The New French President. Ok, this one I don't understand. France is getting a new president, not only because of their rule of only 2 consecutive terms, but also because everyone becoming fed up of Mr. Sarkozy's flamboyant expenditure. With the new French president likely to be Mr. Francois Hollande, it is uncertain what policies he will follow. Even though he is part of the socialist party, he is opposed to the current trend of austerity gripping Europe. The uncertainty coupled with his opposition to the sound principle of austerity in the face of bankruptcy is probably the reason why no one wants to bank on French petroleum further devaluing brent crude.
3. U.S Job Scenario. The U.S rate of job creation has been far short as compared to predictions leading to destabilizing their economy. Being an oil economy, it is draining the value of American crude (WTI and NYMEX being affected here).
As crude oil invariably varies from one well to another, some standards have been set up in order to facilitate crude oil trading in mercantile exchanges.
Brent Crude -> European standard derived from the North Sea. Light crude, not too sour.
WTI -> 'West Texas Intermediate'. Average of many sampled wells of Texas. Very light, not at all sour.
NYMEX -> New York MErcantile EXchange. A synthetic standard created for trading (as the name makes it obviously clear) on the New York Mercantile Exchange. Very light, not at all sour.
There are many other standards besides. For example, OPEC countries have their own for internal trade, but as a whole when it comes to international deals, these three are the ones most commonly referred to.
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