Royal Dutch Shell Purchasing Brent Unexpectedly Sends Market Haywire

Posted in Top Headlines by on February 20, 2017

Crude oil futures are set by a number of factors, including buyer interest, supply, world events and trading trends. Most investors know that Brent crude is the primary marker for how all other petroleum-based investments are going to fare. Recently, an interesting observation about Brent crude and Royal Dutch Shell has proved to be another critical factor.

Shell Sends the Market Haywire

When the price of oil futures is so low that investors are hanging onto contango, investors start to get jittery. Looking back at last year’s market occurrences, it is evident that the jitteriness of some investors worked against them.

Tanker ships of crude oil sat stagnant waiting for the investors holding the control of the oil to move it. While oil sat in the tankers, Shell was making moves with its holdings that sent the market haywire for a bit. In fact, Shell’s impact on oil futures last year was substantial. The international company best known for its refineries and gasoline products only had to start trading for the market to move in a contrary manner to what it should have done at that point.

Market Players Aren’t Happy

While it is important to note that Shell isn’t doing anything illegal making these moves, some market players are noting that the oil giant is pushing its weight around in a manner that goes against the unspoken rules of the oil trading industry. Shell responded with an assertion that the company isn’t doing anything underhanded and that everything is on the up-and-up.

No matter where you stand with oil trading, keeping an eye on how Shell interacts with Brent crude futures and other markers in oil futures is advisable.

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