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The CL Crude-analysis Thread
Started:December 17th, 2014 (02:33 PM) by tturner86 Views / Replies:125,828 / 1,754
Last Reply:December 4th, 2016 (01:02 AM) Attachments:450

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The CL Crude-analysis Thread

Old May 31st, 2015, 11:19 PM   #1111 (permalink)
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So much for that one

Well it worked good for 3 days. On the fourth, it crashed and burned, over and over again. Ended day down almost $900. One critical point I missed, what looked like a great entry/exit on minute chart did not on other time charts.

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Old June 1st, 2015, 08:49 AM   #1112 (permalink)
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60.70 was the high the mkt has retraced a dollar from the high

whats the prognosis

buy on dip with a breakage of 58?

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Old June 3rd, 2015, 01:19 PM   #1113 (permalink)
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More Random Musings of a Spread Trader

Crude curve is still in relatively steep contango. CLN5 trading approx $6 below CLZ8 (which is month 42) so ~15c/month. Normally you would expect contango to be steepest at the front, and hence butterflies to be negative. Well interesting last night the z5/z6/z7 butterfly settled -1c and the z6/z7/z8 butterfly settled +10c. The last time either of these spreads settled positive was back in Oct/Nov 2014 when crude was significantly higher than here, and of course was backwardated.

The following scatter plot shows graphically how out of whack this is.
Note CL_18 is currently CLZ6, CL_30 is CLZ7, CL_18 is CLZ8

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Full Disclosure:- I am slightly short this Butterfly but do have hedges on against it


Last edited by SMCJB; June 3rd, 2015 at 01:22 PM. Reason: Full Disclosure
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Old June 3rd, 2015, 07:35 PM   #1114 (permalink)
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Bad week trading for me so far.
How are yall doing?

Today was particularly choppy/ had a lack of opportunity.

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Old June 3rd, 2015, 08:40 PM   #1115 (permalink)
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Bad week trading for me so far.
How are yall doing?

Today was particularly choppy/ had a lack of opportunity.

I got thumped yesterday. I do a lot of quant/statistical & mean-reverting trades and when the market is out of whack with my models (eg my chart above), it normally means some pain for me. The one upside to taking that pain, is that (at least for the mean reverting trades) it's an opportunity to add more which inevitably means more profit once it does revert.

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Old June 5th, 2015, 01:31 PM   #1116 (permalink)
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Quoting 
Physical oil is coming under pressure as trade houses unwind a profitable storage play after several months that saw them holding millions of barrels on tankers at sea.

A drop in the volume of crude stored for speculative profit is putting more supply into an already saturated market, elbowing out new loadings leading to a build-up of unsold West African, North Sea and Mediterranean oil.
...
At its peak earlier this year as much as 50 million barrels of oil was estimated to have been earmarked for storage on tankers. The oil market has since rallied - flattening that discount, also known as a contango, leading trade houses to cash in on profits.

Shipping sources and shipping data estimated that volumes earmarked for contango-led floating storage had dropped to as few as 10 tankers, known as very large crude carriers, each capable of carrying a maximum of 2 million barrels, meaning at most 20 million barrels.
...
Mallinson contends that the long-term effect may be a drop in the market surplus of crude oil, but in the near-term, it adds to the oversupply:

"It makes the pain worse in the short term," he said.

Nevertheless, for holders of millions of barrels of West African crude and also North Sea oil in the Atlantic, the sell-off in floating storage could mean a longer wait to offload cargoes as they compete. "Everyone is trying to sell," one oil trader said.

Bloated oil market fed more crude from unwinding sea storage plays | Reuters

Physical speculators now will have no reason to support market if they are almost out of holding oil.

I feel oil will drop sometime. Problem is I have no clue when that will happen.

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Old June 5th, 2015, 02:02 PM   #1117 (permalink)
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From a price / risk management perspective, physical oil being sold into the market shouldn't effect prices. That oil is all hedged with other instruments and as they oil is sold, those hedges are unwound. -1+1 = 0. Hence it is my belief that this is not what is driving prices lower.

From a fundamental perspective, physical oil being sold into the market makes an already bearish supply/demand picture look even more bearish. I believe that it's other people's perception of these fundamentals, that is the reason they start selling, which is what drives prices lower.

Maybe just semantics, but in reality a different cause-effect chain.

For what its worth the larger VLCC's have max sizes of 2.2 million barrels, not 2 million. ULCCs are even larger, and are actually what is often used for floating storage.


ron99
Physical speculators now will have no reason to support market if they are almost out of holding oil.

I feel oil will drop sometime. Problem is I have no clue when that will happen.

While I don't prescribe to the "physical speculators supporting the price of oil theory" if I was a directional crude trader (and I am not) I would agree with @ron99 and be looking for a drop in prices from here. Not only am I surprised crude has bounced as much as it has, I'm even more surprised how flat the curve has become.

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Old June 6th, 2015, 07:49 AM   #1118 (permalink)
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just my opinion

I like trading crude, can't trade full time, so I trade for an hour in the early mornings before work. I know this is only my 2nd post (very sad) but recently reading Big Mike's mention of the silent majority not contributing, I thought I would try to do my part in changing that- even though i feel i don't have a lot to add. I have always scalped in the mornings ( always with mixed results) but reading many posts about trading the bigger picture has got me to start thinking about just trying to position myself and going with the longer term movements. In light of that I've been watching the 30 minute chart and I just look for areas where buyers have bought and turned price and areas where sellers have sold from and turned price, and as these areas of support and resistance are touched again I look for reaction around them but I wait for price also to hold at an area before entering, seems simple

I am looking at one such area now on the 30 minute chart, where buyers have bought the 59.35 range many times recently and sellers have sold the 59.00 range. Seeing friday's close is just below 59.00 has me watching this closely. for me to go short here I would need to see more of a holding of price here- and then a continuation downward. For me to be a buyer i would need to see price get about the 59.35 area and hold this. Seems simplistic but thats me, nothing but a few lines on my chart and not entering until price holds an area.

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Old June 8th, 2015, 11:57 AM   #1119 (permalink)
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New CME Report
"Oil Set to Fall After Summer Driving Season?"
http://www.cmegroup.com/education/featured-reports/oil-set-to-fall-after-summer-driving-season.html

Has some interesting charts in it as well
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Old June 8th, 2015, 02:15 PM   #1120 (permalink)
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Quoting 
Andrew Weismann of EBA analytics says that on Tuesday June 9, the Energy Information Administration (EIA) the branch of Department of Energy responsible for providing energy statistics is likely to significantly increase its estimate of U.S. crude oil production for 2015 and 2016. Weisman says that while the magnitude of this increase is not yet known, an increase of 150,000 200,000 barrels a day is possible. The International Energy Agency is likely to announce similar increases later in the week.

He says these revisions directly contradict EIA's earlier view that production in major U.S. tight oil plays would decline rapidly in May, with the potential to drop by as much as 400,000 barrels/day by September. Instead, estimated May production could be raised to as much as 9.59.6 million barrels/day, surpassing the previous all-time record. This shift, coming on the heels of OPEC's decision on Friday not to curb output, could significantly affect oil prices.

This matches the sudden jump in weekly US oil production to 9.6 mil from 9.3-9.4 two weeks ago. Kinda explains the sudden jump.

Here's a link to tomorrow's Short-Term Energy Outlook report. It comes out between 12:00-12:15 pm ET.
Short-Term Energy Outlook - U.S. Energy Information Administration (EIA)

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