Looking Back at Global Oil Prices

Global oil prices rose significantly in 2021, making up for the losses clocked in 2020. The benchmark Brent crude oil went up 55 percent in 2021. It kicked off the year at $55 per barrel, rose to $70/b in Q1, rallied to just below $80/b mid-year, then ripped upward to $86/b in October before closing the year at $75/b. Brent’s average price for 2021 was $71/b, a three-year high.

Another benchmark, West Texas Intermediate (WTI) crude oil, followed a similar pattern as Brent crude. It started the year at $47/b, hit about $75/b mid-year, peaked at $86/b in October, then closed the year at about $75/b. Its average price for 2021 was 68/b. Overall, WTI was up 62 percent for the year.

Oil prices started the year positively, rising on the back of a global re-opening of economies after months of COVID-19-related lockdowns. High vaccination rates and loosening travel restrictions unleashed a demand for oil much higher than producers could supply, prompting upward price action.

The global mismatch in demand and supply at the start of 2021 was largely because of a December 2020 resolution by the Organization of Petroleum Exporting Countries (OPEC) to limit oil production by 0.5 million barrels per day (mb/d) to shore up prices that had taken a beating in 2020 (Brent fell about 27 percent in 2020).

In the United States, high crude prices were propped up by low production from United States producers (up to 1.3mb/d less) because of adverse weather in February and producers' general decline in investment. Data from the US Energy Information Administration (EIA) shows that since Q3 2018, the 47 publicly traded United States energy and petroleum explorers and producers have generally been winding down capital expenditure from over $23 billion to about $6 billion in Q3 2020. Though they increased capital expenditure for most of 2021, this still lagged behind their 2015-2018 investments. The ratio of capital expenditure to cash flow for the 47 producers was 41 percent in Q3 2021, the lowest in 26 years.

These local and global factors contributed to such a low crude supply at the start of 2021 that by March 2021, Brent prices had recovered to their January 2020 highs of $70/b and by mid-year, were just shy of $80/b.

In July 2021, OPEC announced that it would start increasing crude oil production every month by 0.4mb/d. This calmed the markets, with Brent withdrawing to below $70/b in Q3. However, the reprieve was short-lived. Hurricane Ida, a Category 4 hurricane, made landfall on the United States coast of Louisiana on Aug. 29, shutting down 96 percent of crude oil production in the Gulf of Mexico. This, combined with commercial oil inventory shortages and high demand in Asian markets, triggered an energy shortage that was the catalyst for the final crude oil rally of the year, where Brent prices hit a seven-year high of $86/b in October.

Toward the end of the year, the emergence of a new COVID-19 variant, Omicron, caused tension. Renewed lockdowns and travel restrictions in parts of the world dealt a blow to oil, and Brent declined from its multi-year high to close the year at about $77/b.

An Overview of Trading Binary Options

A binary option is a financial option in which the reward is either a predetermined monetary sum or zero. The asset-or-nothing binary option and cash-or-nothing binary option are the primary forms of binary options. If the option expires in-the-money, the former pays a predetermined sum of cash, whereas in the latter case, the trader pays the value of the underlying security.

Traders make predictions on whether an underlying asset is above a specified price at a given time. A trader buys a binary option if they believe the price of an underlying asset will be above a certain price at a specific time but sells it if they think it will fall below that price. Until the option expires, the bid and offer vary. To lock in a profit or minimize a loss, one can close a position at any point before expiry.

However, there are disadvantages: Binary options are vulnerable to fraud in practice and are prohibited as a form of gambling in some jurisdictions. Because of their negative cumulative payout and the fact that they are touted as requiring little or no market knowledge, binary options are looked at as a type of gambling rather than an investment. Unfortunately, many binary option brokers use the surface-level simplicity as scams.

Some brokers also manipulate price data to defraud customers. Even though binary options are sometimes traded on a licensed exchange, many are unregulated and vulnerable to fraud. Traders should be wary when selecting a broker and only pick a reputable one.

Binary options traders profit from properly forecasting whether a market will be over a certain price at a specific time. Traders either gain a predetermined profit or lose the money paid to open the trade when it expires. Because risk is capped, traders can lose their capital and nothing else. A binary option contract comprises three main components: the underlying market, the price at which the strike is made, and the time and date of expiration.

Binary options traders can trade a variety of asset classes. Major indexes are available for trading through brokers. Global indices, forex pairs, and commodities are also available to binary options traders. Intraday options give day traders the chance to earn a guaranteed return even in quiet market conditions.

Day traders who wish to hedge other stock or commodity holdings against that day's movements can employ daily options, which expire after the trading day. Weekly options expire after the trading week and are traded by swing traders throughout the week.

Unlike the stock or foreign exchange markets, where price slippage might occur, binary options risk is limited. It's impossible to lose more than the trade's cost. Experts recommend that individuals trade with money they can afford to lose and use a demo account to understand how binary options work before using real money entirely.

Every binary options trader has their judgments based on what has already occurred and what they believe this signifies for future market moves. Of course, no one can predict the future, and even seasoned traders can't guarantee what will happen. Traders should learn the various forms of market analysis (including fundamental analysis and technical analysis) to trade options successfully.

An Overview of Cryptocurrency

Cryptocurrency is an innovative development in the world of commerce and exchange. It is a digital currency you can exchange for goods and services online. Enabled by blockchain technology, cryptocurrency owners can exchange the currency without a third party such as a bank. That particular feature, including a host of others, has led to an increase in the variety of cryptocurrencies and digital assets available today

While the numbers are still climbing, over 4,500 unique cryptocurrencies have been introduced to cyberspace and are being used by many. One reason the number of cryptocurrencies keeps surging is that the process of mining them can be relatively simple. With the source code of an already existing cryptocurrency, you can create another. For example, many of the newer cryptocurrencies are modeled after Bitcoin because it features an open-source code and a design structure that is practically resistant to censorship. The censorship-resistance feature of crypto ensures that no nation-state, corporate body, or third party can exert control over crypto transactions. Once a transaction is completed, it becomes immutable. The cryptocurrencies designed using Bitcoin’s source code are called altcoins.

Fundamentally, the two terms “token” and “coin” are common in the rapidly evolving crypto world and are sometimes used interchangeably. While the two words seem to describe the same thing, they are quite different.

A digital coin, like Bitcoin and Litecoin, depends on its exclusive blockchain technology. Blockchain is an online public ledger that assigns a unique identity, otherwise called a hash, to each transaction. Digital coins are very similar to the dollar. They are a valuable medium of commercial exchange.

Unlike digital coins, tokens are not merely another form of digital currency. For one, they do not have their exclusive blockchains. They rely on the blockchains of other cryptocurrencies like Ethereum. A token is very similar to a “deed.” It represents an individual’s ownership or claim over a particular asset.

Tokens have multiple purposes. They may have a specific function, allowing users to transfer files over a decentralized network like the Storj tokens. They may also be used as an adjoining component of a software program to primarily authenticate a user’s identification or monitor products as they move through a supply chain, among other purposes. Some of these tokens, like Ether, have reportedly been used in real estate and the art world to facilitate transactions. In contrast, others, namely NFTs (non-fungible tokens), certify and represent unique digital art.

According to a survey conducted by the Pew Research Center, of the bulk of Americans familiar with cryptocurrency, only 16 percent claim to have traded, used, or invested in the digital asset. More men, particularly from 18 to 29, have some form of knowledge and experience in cryptocurrency.

Cryptocurrency in the United States is typically owned by young Americans who are wealthy and tech-savvy. About 70 percent of crypto owners have an annual income that exceeds $1 million, and only 5 percent of the current cryptocurrency owners are above 55.

For many cryptocurrency holders, the digital asset helps diversify their investment portfolio. Although, 46 percent of American cryptocurrency owners use theirs for commercial transactions. In March 2021, PayPal started enabling shoppers across the United States, make purchases and complete virtual transactions from the many merchants enlisted on the PayPal platform. Banks have begun formulating systems that allow cryptocurrency transactions between their clients.

Collectively, cryptocurrencies are valued at over $3 trillion. Over 300 million people across the globe purportedly own crypto. Government leaders worldwide continue debating cryptocurrency regulation. China has recently banned the use of cryptocurrencies in commercial exchanges. In contrast, El Salvador has become the first country to legalize Bitcoin.

A History of Shell – From Origin to World War I

Royal Dutch Shell PLC, or simply Shell, is a corporation known to be one of the biggest petroleum corporations publicly listed. Shell is involved in oil and gas exploration, production, refining, and sales. Shell also has an interest in various enterprises aside from oil, delving into metal and coal mining, solar energy, forestry, and biotechnology, amongst other things.

Before it became a unified entity in 2005, the Royal Dutch/Shell Group had a complicated corporate structure, comprising hundreds of companies spanning the globe. All the companies which operate in its corporate infrastructure were owned by its two publicly listed parent companies: The Royal Dutch Petroleum Company, a Dutch company, which held a 60% stake in the company, and the “Shell” Transport and Trading Company, a United Kingdom-based corporation, which owns the remaining 40%.

The Royal Dutch/Shell Group was established in 1907 when the two rivals, “Shell” Transport and Trading Company Ltd, merged with Royal Dutch Petroleum Company. Six years before this merger, Marcus Samuel junior of the “Shell” Transport and Trading Company, was lucky and opportune enough to secure the transport and distribution rights for oil discovered in Texas. He took the deal from Standard Oil, his company’s biggest rival at the time. However, Royal Dutch had set up a network in Asia with its tankers, causing the “Shell” Transport and Trading company to only sell at half capacity. The two companies officially merged on April 23, with Hendrik W.A. Deterding of Royal Dutch as the general manager.

However, the two companies have their unique origins that brought that into that position. “Shell” Transport and Trading Company started with Marcus Samuel; he decided to create a firm in London to expand his antique-selling business to encompass oriental seashells. These seashells were very popular for interior design at the time. His company was so successful at importing and exporting them that it laid the groundwork for what would become one of the world’s largest energy corporations. When Marcus Samuel died, his sons Marcus junior and Samuel continued the business and immediately set about to expand it.

Marcus saw the potential in trading oil and had eight tankers built. He had this built to prevent problems that cropped up due to shipping storage problems as barrels were prone to leakage. By the end of 1896, Shell had developed oil wells and refineries in Borneo.

Founded in 1890 by Jean Baptiste August Kessler and Henri Deterding, the Royal Dutch Petroleum Company (originally known as the Koninklijke Nederlandse Maatschappij tot Exploitatie van Petroleumbronnen in Nederlands-Indië or “Royal Dutcch Company for the Exploitation of Petroleum Wells in the Dutch East Indies”) was essentially run by Dutch bankers, former colonial administrators, and business people. In 1892, the company built a pipeline and refinery in Sumatra, tapping into the region’s oil reserves. They moved on to building tankers and storage units with the direction of Deterding, and they also established a sales organization.

By World War I, the Royal Dutch/Shell Group was a significant source of fuel to the British Expeditionary Force and the sole provider of aviation fuel. The company also gave the army more than half of the TNT it used while giving it unlimited access to all of its shipping vessels. In appreciation for Shell’s assistance in the war, the United Kingdom made Marcus Samuel Junior, 1st Baron Bearsted of Maidstone in the County of Kent.

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