Petroleum Pricing

By Econ70 | 09/25/2013

In a sign domestic oil prices are expected to fall in the future, the price of futures contracts on West Texas Intermediate oil are cheaper the further into the future the settlement date. Futures prices are usually higher than current prices because futures prices must include storage, carrying costs and more. Reasons for this inversion…

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Pump it Up

By Econ70 | 06/17/2013

Despite a US Energy Information Administration report that global oil reserves are 10% higher than in 2011, due to the discovery of 345 billion barrels of shale oil, don’t expect lower pump prices. This is because unlike Alaskan oil, shale oil comes from hundreds of small wells, with high production costs. If prices fall, pumping…

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UPS Earnings: Up but Down

By Econ70 | 05/03/2011

UPS released its earnings last week. Volume fell here but grew overseas. Pricing power in the US was good and revenue surged despite weak volume because big investments in technology resulted in worker hours falling 2%. UPS mgt also had concerns about oil. In short: great $$$$, mediocre US outlook, a better situation in Asia,…

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