Publications: Notes at the Margin

Is Anyone Listening? (October 6, 2014)


Saudi Arabia announced its crude oil pricing formula adjustments for November. As a Platts' headline described the action, "Saudi Aramco Continues to Slash Crude Prices to Asia." Brent had been up more than $1 per barrel, trading around $96 prior to the news. Prices then slumped to $93.78. On Thursday, futures dropped a bit more. The real action, though, was in the cash market. Dated Brent fell from $94.59 per barrel on September 30 to $91.62 last Friday. For one of the few times since 2010, cash Brent could be purchased for less than cash WTI. As we explain in this week's report, Brent seems headed for $50 per barrel or lower.


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