Saudis drop WTI oil contract in favour of Gulf euro
Posted by Ivo Cerckel on October 29th, 2009
Aramco thereby decided to drop the widely used West Texas Intermediate oil contract as the benchmark for pricing its oil, dealing a serious blow to the New York Mercantile Exchange. (2)
A new US oil pricing benchmark is rapidly taking shape, threatening to further erode the dominance of the Nymex crude futures contract. (3)
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. (4)
Lorenzo Bini Smaghi, a board member of the same ECB, said on, 06 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.” (5)
Yesterday’s move reveals the growing discontent of Riyadh and its US refinery customers with WTI after the price of the price of the benchmark became SEPARATED from the global oil market this year. (2, again)
It’s up to my dear reader to connect the dots herself.
Ivo Cerckel
honestmoney@maktoob.com
http://twitter.com/ivocerckel/
NOTES
(1)
New oil price benchmark gathers steam http://online.wsj.com/article/SB125676974879614339.html?mod=googlenews_wsj
Text .By BRIAN BASKIN
(2)
Saudis drop WTI oil contract
By Javier Blas in London
Published: October 28 2009 20:27 | Last updated: October 28 2009 20:27
http://www.ft.com/cms/s/0/8cda145a-c3fe-11de-8de6-00144feab49a.html
(3)
New oil price benchmark gathers steam
By BRIAN BASKIN
OCTOBER 28, 2009, 7:06 P.M. ET http://online.wsj.com/article/SB125676974879614339.html?mod=googlenews_wsj
(4)
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
(5)
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
No related posts.
October 30th, 2009 at 09:13
We thought the Gulf Co-operation Council would devise its currency and then oil would be priced in it.
We did however also know that oil would be the backing of the currency.
This was the chicken and the egg.