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The CL Crude-analysis Thread
Started:December 17th, 2014 (02:33 PM) by tturner86 Views / Replies:125,174 / 1,753
Last Reply:7 Hours Ago (02:57 PM) Attachments:450

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The CL Crude-analysis Thread

Old May 6th, 2015, 03:23 PM   #1071 (permalink)
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@SMCJB
Thanks for leveraged ETF tutorial! Now I understand why my etf didn't come back along with the price of crude. "ohil" well. :0

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Old May 7th, 2015, 01:44 AM   #1072 (permalink)
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Quoting 
Tens of millions of barrels are struggling to find buyers in Europe with traders of West African, Azeri and North Sea crude blaming poor demand.

The deep disconnect between the oil futures and physical markets looks similar to the events of June 2014 when the physical market weakness became a precursor for a futures price crash.

"Being large physical buyers of crude we have a direct pulse of the market and feel immediately when it is well supplied, as is happening now," Dario Scaffardi, executive vice resident and general manager of independent Italian refiner Saras, told Reuters.

"In the short-term, futures prices do not necessarily reflect accurately the physical market."


Quoting 
Traders in Azeri Light crude, usually one of Europe's favorite grades due to its high quality, said some 10 cargoes from the May tanker loading program are struggling to find buyers, just two days before June volumes are due to go into the market.

As a result, the Azeri price premium to benchmark dated Brent is the weakest since December, when it hit a five year low.

In the North Sea, Norwegian Ekofisk crude fell to its weakest since August last year due to a significant number of unsold May cargoes, despite June program already trading.

The worst situation, however, is in Angolan and Nigerian crude, which has struggled in the past two years due to the U.S. oil boom.

Traders said around 80 million barrels of Nigerian and Angolan crude oil are on the market with at least a dozen May-loading cargoes still available.

Indian refiners, which had bought large quantities of Nigerian oil in March and April, are now turning to cheaper Iraqi Basra and Venezuelan crudes.

"Near term oil market fundamentals continue to look dire, particularly in the Atlantic Basin, with Nigerian, Mediterranean and North Sea differentials all weak," analysts from London-based Energy Aspect consultancy said on Wednesday.


Quoting 
The head of oil trading house Vitol, the world's largest, Ian Taylor, said he saw another dip in oil prices soon.

Oil's bull run hides a deep disconnect, crude traders warn | Reuters

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Old May 8th, 2015, 02:08 PM   #1073 (permalink)
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Quoting 
Baker Hughes Rig Count: U.S. -11 to 894 rigs

U.S. Rig Count is down 11 rigs from last week to 894, with oil rigs down 11 to 668, gas rigs down 1 to 221, and miscellaneous rigs up 1 to 5.

U.S. Rig Count is down 961 rigs from last year at 1855, with oil rigs down 860, gas rigs down 102, and miscellaneous rigs up 1.

Also available on their website.

Rig count close to its bottom?

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Old May 8th, 2015, 02:35 PM   #1074 (permalink)
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Strange market.
Aug/Sep spread is trading at a premium to Sep/Oct, Oct/Nov and Nov/Dec and flat with Dec/Jan! Don't see that often.
As bearish as the fundamentals are, it just 'feels' like the only thing holding this market down is June.

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Old May 8th, 2015, 02:56 PM   #1075 (permalink)
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SMCJB View Post
Strange market.
Aug/Sep spread is trading at a premium to Sep/Oct, Oct/Nov and Nov/Dec and flat with Dec/Jan! Don't see that often.
As bearish as the fundamentals are, it just 'feels' like the only thing holding this market down is June.

Got me thinking so I ran some analysis.
Since the beginning of 2000 there have 1018 days where the month3-month4 spread settled higher than month4-month5 AND month5-month6 AND month6-month7 spreads.
Of those 1015 days, the market was in backwardation for 949 of them and in contango for just 69.
So if you say we have had approx 3600 trading days in this period, this equates to less than 2% of the time.
Pretty rare, but I must admit, not as Rare as I expected.


Last edited by SMCJB; May 8th, 2015 at 02:57 PM. Reason: typo
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Old May 8th, 2015, 03:52 PM   #1077 (permalink)
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From a Seeking Alpha article "It's Time To Sell Oil: Don't Let The Decline In Inventories Fool You, Supply And Demand Remain Unbalanced" by Force Majeure

Moving onward from domestic to foreign oil production, the EIA reported yesterday that crude oil imports last week averaged just 6.54 million barrels per day. This was down a huge 905,000 barrels per day week-over-week and was off 820,000 barrels per day from the 1-year average. In fact, last week's imports were the second lowest this millennium, behind the 6.46 million barrels per day during the third week of May 2014. Unfortunately, this decline in imports was not due to a fundamental change in the international market, but rather a one or two-week fluke. Several cargo ships carrying 13 million barrels of crude oil were delayed leaving their ports. These ships have since departed and should arrive in US ports by the third week of May. Should this cargo to arrive on the market all at once, it would have the potential to boost US imports by 1.8 million barrels per day.

In fact, last week's surprising withdrawal can be blamed almost entirely on this anomalous, short-term drop in imports.





ron99 View Post
The drop in oil inventories reported today was almost entirely caused by the 6.3 mil barrels of lower oil imports for the week compared to the prior week. I don't see any news that the Houston Ship Channel was closed.

Anybody know why imports were down so much?

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Old May 8th, 2015, 04:08 PM   #1078 (permalink)
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britkid99 View Post
From a Seeking Alpha article "It's Time To Sell Oil: Don't Let The Decline In Inventories Fool You, Supply And Demand Remain Unbalanced" by Force Majeure

Moving onward from domestic to foreign oil production, the EIA reported yesterday that crude oil imports last week averaged just 6.54 million barrels per day. This was down a huge 905,000 barrels per day week-over-week and was off 820,000 barrels per day from the 1-year average. In fact, last week's imports were the second lowest this millennium, behind the 6.46 million barrels per day during the third week of May 2014. Unfortunately, this decline in imports was not due to a fundamental change in the international market, but rather a one or two-week fluke. Several cargo ships carrying 13 million barrels of crude oil were delayed leaving their ports. These ships have since departed and should arrive in US ports by the third week of May. Should this cargo to arrive on the market all at once, it would have the potential to boost US imports by 1.8 million barrels per day.

In fact, last week's surprising withdrawal can be blamed almost entirely on this anomalous, short-term drop in imports.

Thanks, Brit. Also from this good article.


Quoting 
Analysts at IHS Inc. estimate that there are 2500 to 3500 US wells that have been drilled but not hooked up to pipelines. $60/barrel is the oft-quoted profitability threshold for these wells. If we assume an initial output of 300 barrels per day per well, if only a quarter of these wells are completed, this would add 225,000 million barrels per day of producing capacity to the market, dwarfing the decline in domestic production over the past six weeks.


Quoting 
while the US rig count has been crashing over the last 6 months, major Middle Eastern producers Saudi Arabia, Kuwait, and the UAE have increased their net rig count by 30% over the past year to a record 150 rigs, as the Figure 6 below shows.

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It's Time To Sell Oil: Don't Let The Decline In Inventories Fool You, Supply And Demand Remain Unbalanced - The United States Oil ETF, LP (NYSEARCA:USO) | Seeking Alpha

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Old May 8th, 2015, 04:14 PM   #1079 (permalink)
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Quoting 
if only a quarter of these wells are completed, this would add 225,000 million barrels per day of producing capacity to the market, dwarfing the decline in domestic production over the past six weeks.

I assume 225K barrels per day...

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Old May 8th, 2015, 08:54 PM   #1080 (permalink)
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Today's DCOT futures only report clearly shows who is behind the price increase of CL from 43 to 60 (3/17 to 5/5).

The Commercial traders have increased their net short position by 32,000.

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The Index traders have increased shorts by 45,000 (not on chart). The Other Reportable traders have decreased their net long by 39,000.

But the Managed Money (specs) have increased their net long by 122,000.

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This 17.00 increase in price has been entirely fueled by spec buying.

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