Has Ukraine Become Driver of Global Oil Prices?

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April 28 (Bloomberg) -- Bloomberg's Olivia Sterns, Daniel Dicker, trader at New York Mercantile Exchange, and Bob Iaccino, chief market strategist at TopStep Trader, put oil futures in focus in "On The Markets" on Bloomberg Television's "In The Loop."

Break down the basics.

Why is the threat of tighter sanctions raising the price?

This is the huge amount of crude that comes from russia.

If you increase sanctions, you make it more difficult for them to produce oil.

That will drive prices higher.

They are the world's biggest exporter of energy.

That is correct.

They are number one in natural gas and number two in crude oil.

Is what is moving oil all about russia?

I think it is a dichotomy of what is going on.

We have a large surplus that is going on domestically.

We have had turnarounds of the gulf coast.

We have difficulties in libya.

They have a civil war that is undecided who owns the russian assets.

Who owns them and who was exporting or not exporting them.

That comes on the other side of the ukraine tensions.

You have a bit of a push me, pull you situation.

Bob, let's bring you in their.

-- here.

How are you trading the price of oil?

I agree with a lot of what dan said.

We are seeing a reduced demand out of europe, latin america, just slightly for refined products.

The supply is pushing down into the gulf.

Rent is -- brent is staying elevated.

There is plenty of brent on the global oil market.

You should see plenty of oil on the market.

Russia will continue to produce.

We want to sell u.s.-backed crude back to about $97 and two cents -- $97.02. what do you see happening between the spread of brent and crude?

This is not about supply and demand in terms of oil.

There was a slightly reduced demand out of latin america and europe, in the short term.

The brent crude, libya is coming back online.

There will be 200,000 barrels a day coming back online.

Possibly 700,000 barrels.

That is good crude, not the heavy crude moving out of iraq.

The brent will stay elevated.

The wti is what you want to look at.

Let's put bob's trade into real terms for you.

If you sell oil at $100 to buy it back at $98 $.38, it is going to make a profit of $1.62 per barrel.

The prophet is really $1620. what is contract life and why is it so important?

This is one of the most important aspects of trading a commodity, as opposed to a stock.

You cannot think of it in the same way as stocks.

Commodities are broken up into monthly contracts.

If you belong or short oil -- get long or short oil, you have to close out that position in 30 days because that contract literally ends.

That is what we're talking about when we are talking about life of a contract.

We will have to keep on moving down the board in terms of prices.

Think you so much for joining us.

-- thank you so much for joining us.

We know how fast the economy is growing or not fast.

Thanks to new data from the government, we will know why.

Mike mckee is in the newsroom with the real deal on the economic details.

The government had been

This text has been automatically generated. It may not be 100% accurate.


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