US controls price of crude oil

Who is controlling the price of crude oil? The British Petroleum Company (BP), OPEC and Russia are all under suspicion, but there is really only one entity controlling the market.

Within one month, the futures contracts of both West Texas Intermediate (WTI) and Brent dropped by more than US$10 and the October contract for WTI decreased 17.5 percent between August 8 and September 11.

In fact, the news did not impact the market much. Besides a couple of news items from BP, there was a ‘new discovery’ at an oil field in the Gulf of Mexico in the US. The Iranian issue remains unresolved and the hurricane season has not yet passed. However, the price of crude oil has fallen substantially. Who is manipulating it?

The US government was suspicious about whether BP was manipulating the price so it had the Commodity Futures Trading Commission (CFTC) investigate the company. Since the news that BP’s oil field in Prudhoe Bay, Alaska, was closing due to pipe damage was released, the price of oil has declined. Last week, before BP announced plans to resume oil production in Prudhoe Bay and oil prices began to rebound, the cost had dropped by more than $10. This is sufficient to suspect BP of price tampering. However, if BP has controlled the hundred-billion-dollar crude oil market for such a long time, its status is a bit too high. BP’s news did affect the price of oil, but only temporarily.

People’s Daily Online