note: these are just notes, and i link bookmarks below for everything! these are not original thoughts

This is just a really busy week on thinly traded markets

https://twitter.com/Tobin_Tweets/status/1463493175901884417?s=20

Structure of Oil and Gas

What happened in March 2020?

What happened leading up to now?

What happened yesterday?

Structure of Oil and Gas

The oil and gas industry is broken down into three segments: upstream, midstream, and downstream.

• Hydrocarbons make up crude oil and natural gas, which are naturally occurring substances found in rock in the earth's crust.
• Hydrocarbons are brought to the surface by drilling through the cap rock and into the reservoir. Once the drill bit reaches the reservoir, a productive oil or gas well can be constructed and the hydrocarbons can be pumped to the surface.
  • Upstream: exploration and production of oil and gas, drill to extract (E&P)
  • Midstream: Transportation, trucking shipping etc - pipleine,water,truck
  • Downstream: refineries, removing impurities

    • So this is really important because this is how we get from oil to gas

    • this is important bc crude oil is noto gasonline it has to be a finsihed product

      it goes to a refinery - crude oil gets truend into gas

      

Backwardation vs contango

• contango: more expensive in future, he futures contracts are trading at a premium to the spot price.
• backwardation: cheaper in future, the spot price is higher than future prices and has generated a downward sloping forward, or inverted, curve which is in backwardation.

Brent vs WTI

• Brent Blend, is the most common, internationally used oil benchmark. It is based in London, traded on the InterContinental Exchange (ICE), and consists of light, sweet crude oil from offshore drilling in the North Sea.
• West Texas Intermediate (WTI) is used for light and sweet oil in the United States, specifically, crude oil that comes from land-locked wells in Oklahoma.