Saudi Aramco is abandoning the West Texas Intermediate benchmark to price oil for sale to U.S. consumers because it is “disconnected” from the company’s customers, Chief Executive Officer Khalid Al-Falih said. The state owned oil company said on Oct. 29 it will start using the Argus Sour Crude Index published by Argus Media Ltd, from next year. Sour refers to the oil’s sulfur content.
“WTI has really become disconnected with the market where we sell and what we sell -- we sell sour crude, heavier sour crude in the U.S. Gulf coast, that is where most of our barrels in North America go,” al-Falih told reporters today in Rabigh, near the Red Sea town of Jeddah in Saudi Arabia. Aramco has priced its U.S. deliveries against WTI, a light, sweet crude delivered at Cushing, Oklahoma, since 1994. The price is determined by oil futures traded on the New York Mercantile Exchange and published by Platts, the energy- information division of McGraw Hill Cos.....Read the entire article.
2 comments:
Aramco is trying to establish the connection of the oil price with her customers through a green piece of paper which will soon be reduced to its intrinsic value.
Of course, there is no connection.
The euro is the first currency that has not only SEVERED ITS LINK to gold, but also its link to the nation-state, said the late European Central Bank president Wim Duisenberg on 9 May 2002. (1)
Lorenzo Bini Smaghi, a board member of the same ECB, said on06 October 2009 that China for one needs to bite bullet. “I think the best way is that China starts adopting its own monetary policy and DETACH itself from the Fed’s policy.” (2)
India is buying gold (3) and is selling USA T-bills to that effect. (4)
Chindia is following the euro’s example.
The USA dollar is toast.
Hence, Aramco needs a replacement.
Ivo
(1)
International Charlemagne Prize of Aachen for 2002
Acceptance speech by Dr. Willem F. Duisenberg, President of the European Central Bank, Aachen, 9 May 2002
http://www.ecb.eu/press/key/date/2002/html/sp020509.en.html
(2)
China calls time on dollar hegemony
You can date the end of dollar hegemony from China’s decision last month to sell its first batch of sovereign bonds in Chinese yuan to foreigners.
By Ambrose Evans-Pritchard
Published: 7:33PM BST 06 Oct 2009
http://www.telegraph.co.uk/finance/china-business/6266790/China-calls-time-on-dollar-hegemony
(3)
India Buys IMF Gold to Boost Reserves as Dollar Drops (Update2)
By Thomas Kutty Abraham and Kim Kyoungwha
Nov. 3 (Bloomberg)
http://www.bloomberg.com/apps/news?pid=20601091&sid=aa6oc6Wz9Ftg
(4)
RBI may’ve sold US T-bills to buy gold – The Economic Times
7 Nov 2009, 0217 hrs IST, ET Bureau
http://economictimes.indiatimes.com/news/economy/finance/RBI-mayve-sold-US-T-bills-to-buy-gold/articleshow/5205038.cms
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