HOW OIL MARKET WORKS
THREAD FROM 2017 OPENING ON TWITTER CRUDE OIL With WTI crude oil creeping up to $60, here's again how oil market works. There are 2 kinds of demand: 1) Consumption demand 2) Storage demand The Consumption Demand is from business which makes FINAL USE of crude oil like: - Refineries - Plastics business - Clothing industry etc The Storage Demand is from business which uses oil for Financial Purpose, NOT for Final Use These businesses are called Intermediaries. Their names are: Vitol, Gunvor, Glencore, Trafigura etc, etc, etc. They do not report their inventories, or rather they actually lie about their inventories. So, oil is not sold from producer to intermediary, as Final Sale, it is sold as Change of Ownership from producer to intermediary. Final Sale is when oil is consumed. In reality, oil was transferred from underground to another underground storage onshore or offshore storage tanker. Simply transfer of ownership, but not final sale. These Intermediaries hold on to that o