There has been a massive surge in the price of crude oil in the last six months

There has been a massive surge in the price of crude oil in the last six months.
Analyse the month-end valuation and forward curve characteristics of the ICE Brent
crude oil futures from August 2021 to March 2022. Discuss the supply and demand
effect implicit in the dynamics of the forward curve. (Note: Approximate word count
expected from this question is 1000 words.)

 

ANSWER:

Crude oil in the last six months

In the U.S. crude oil futures curve, the spread has more than doubled over the stated period. Storage and shipping costs have raised oil prices and rocked the market. Due to the war between Russia and Ukraine, Europe feared the disruption of oil supplies. Because of these fears, oil prices have risen to over $ 100 a barrel. The spread of the initial steel will further expand with these concerns.

Brent crude oil futures rose 1.3% to $ 112.39 a barrel on Friday and hit weekly due to tight international supplies and a sharp rise. The EU's upcoming Russian oil industry has outweighed concerns about international trade. Oil prices rose by about 5% this week, leading the EU to an agreement to withdraw Russian oil products within six months and refinance by the end of 2022. The agreements also include all restrictions on advertising, marketing, insurance, and finance. Services provided by EU companies deliver Russian oil every month. Meanwhile, concerns remain about global growth and its impact on industrial oil demand. Investors fear that tightening monetary policy in the global banking sector could lead to slower growth. Elsewhere, the U.S. Senate passed a bill that could expose OPEC + to litigation over oil prices amid inflation and the oil price crisis.

 

In terms of oil, there are different levels 1 The strongest markets are Brent North Sea Crude oil (commonly called "Brent Crude Oil") and West Texas Intermediate (commonly called "WTI"). Brent is an oil produced in the Brent oil region and elsewhere in the North Sea. Crude oil Brent is the average price for crude oil in Africa, Europe, and the Middle East. The Brent price index determines the value of about two-thirds of the world's oil production. The amount of sulfur and crude oil determines the amount of processing required to keep the oil in the combustion chamber. "Sweet crude oil" means crude oil containing less than 1% sulfur. Both Brent and WTI have good sulfur below 1%, so both are “sweet”. This type is smaller ("hot") than most other oil productions elsewhere. Both of these features make it easier and more attractive for the oil industry.

The expansion widened in 2011, with Brent trading at a higher price than the WTI. The Arab Spring (violence in many Arabian Peninsulas) began in Egypt in February 2011, and the spread of the disease continued. Fear of closing the Suez Canal and because crude oil is no more expensive than WTI. As the pressure on the canal function decreased, so did the expansion. Then in late 2011, the Iranian government threatened to close the Strait of Hormuz, which carries about 20% of the world's oil. Also spread that the price of a Brent barrel went up to $ 25 according to WTI9. In 2015, Brent's budget cuts were due to two reasons. First, the deal with Iran was canceled, allowing the country to export more oil and increasing Iran's daily crude oil trade. Because Brent was the price point for crude oil for Iran, Brent’s growth at that time dropped. Second, however, the value of DY smuggling has dropped. Extending support for U.S. crude oil exports means that pollution will be reduced in the future with less modern U.S. production. As a result, Brent prices fell as Iranian oil expanded and WTI became stronger due to lower U.S. exports and higher prices. It is important to remember that just by hoping that there is generally good oil on the market, prices will fluctuate. Air can also cause value loss. In 2005, storms pushed up oil prices as producers and producers stopped because of bad weather.

In March 2022, the price of a Brent oil barrel was $ 117.25. This is due to consumer concerns about the impact of the Russian-Ukrainian war on world oil prices, which have risen by $ 20 compared to last month. This is the highest monthly average since 2008. The price of crude oil in the Atlantic is Brent. It is used for two-thirds of the world's oil production and is still the most important source of oil in Europe. Brent oil comes from the North Sea and contains oil from the Brent and Forties oil wells in the UK, as well as Oseborg and Ecofisk oil, Norway's second-largest reserves.

Brent’s words are often used

Brent is one of the leading oil producers along with West Texas Intermediate (WTI). Found in essential oils with low sulfur content. Much of Brent crude oil in north-western Europe is refined as an oil in the middle of the distillate.