Being long CL over this particular weekend might not pay of

Ozquant 

Being long CL over this particular weekend might not pay of

should have little effect on crude price, it takes a lot to ramp up production to those levels

Devil Man 

should have little effect on crude price, it takes a lot to ramp up production to those levels

I'd be surprised if CL opens up on monday and a 5% gapdown wouldnt be extraordinarily surprising , It is what it is ...

Ozquant 

Being long CL over this particular weekend might not pay of

Ozquant 

I'd be surprised if CL opens up on monday and a 5% gapdown wouldnt be extraordinarily surprising , It is what it is ...

Being long Dec would have hurt, but August - which is what most trade - was unaffected. As @Devil Man said "should have little effect on crude price, it takes a lot to ramp up production to those levels", it also takes weeks for the that additional production to get anywhere. The same is not true of the Canadian Syncrude outage. The effects of that are instantaneous. Whats amazing though is that Canadian Imports were really high last week - contrary to what you would expect with the outage.

Futuresnoob 

I have a question on this blazing hot Texas afternoon. I want to look at trading crude oil spreads due to liquidity and as @SMCJB pointed out the notional values of the contracts are the same so it wouldn't be unbalanced. My question is I'm undertaking the process of learning to code. The reason is data analysis to start. If you could only choose to learn one language for this( at 42 I'm not the youngest guy) which one would it be? I'm considering R or Python. I know a little C#. Thank you for the input and advice. Jason

If your going to start analyzing crude spreads (past the first few prompt spreads), the biggest problem you will probably have is first getting your data and then organizing it in a usable format. What you do with it after that will probably be easier. I have the Morninsgstar Commodity Data Excel Addin that makes getting the raw data into excel very easy. Unfortunately it's expensive! Converting that data into something usable though is a long task, something I also do in excel. Most of what I do involves converting the data so instead of being in a "Date" format, it's in a "Days until Expiry" format which makes different years a lot easier to compare. To do this I pull every single historical contract - I have found that using CL1, CL2 etc doesn't work for several reasons. 1) the roll dates change/are inconsistent and 2) when you get to the back contracts the number of consecutive available contracts has changed over the years so for example what was CL30 5 years ago may be CL50 now. Once I have my data, I create CSV files and then use R to analyze it. The R vs Python debate is an endless one. I choose R because I like machine learning and there's a lot more libraries for that in R, but I think Python is more flexible. R is very easy to program though, something that means you can get to some advanced stuff very quickly.

SMCJB 

Being long Dec would have hurt, but August - which is what most trade - was unaffected. As @Devil Man said "should have little effect on crude price, it takes a lot to ramp up production to those levels", it also takes weeks for the that additional production to get anywhere. The same is not true of the Canadian Syncrude outage. The effects of that are instantaneous. Whats amazing though is that Canadian Imports were really high last week - contrary to what you would expect with the outage.

Can you explain further regarding the December long and August price delta? They seem fairly correlated.

I'm not sure what more there is to explain, but feel free to be more specific if I misunderstood. The Canadian Syncrude outage is expected to affect Cushing crude stocks for the next two months and Trump's Armada of Saudi Crude Oil can't get here until October, hence the explosion in Q-V specifically and Q-Z in general.

If you've red much of this thread you'll know I think in terms of spreads and butterflies. Well here's two charts showing the relationship for the prompt 3 butterflies for the last 20 years. I think this clearly shows that the CL 2-3-4 Butterfly is at unprecedented levels. CL 2-3-4 is currently Sep-Oct-Nov, and it is the Sep-Oct spread driving this - I believe because the market things supply will change overnight in October when the Canadian production returns and additional Saudi Crude production arrives.

The outlier, 22-Sep-08, was the last trading day of the October 2008 contract and seems like it was expiration day short squeeze corresponding to oil's largest one day change ever as discussed in this article.

SMCJB 

I'm not sure what more there is to explain, but feel free to be more specific if I misunderstood. The Canadian Syncrude outage is expected to affect Cushing crude stocks for the next two months and Trump's Armada of Saudi Crude Oil can't get here until October, hence the explosion in Q-V specifically and Q-Z in general. If you've red much of this thread you'll know I think in terms of spreads and butterflies. Well here's two charts showing the relationship for the prompt 3 butterflies for the last 20 years. I think this clearly shows that the CL 2-3-4 Butterfly is at unprecedented levels. CL 2-3-4 is currently Sep-Oct-Nov, and it is the Sep-Oct spread driving this - I believe because the market things supply will change overnight in October when the Canadian production returns and additional Saudi Crude production arrives. The outlier, 22-Sep-08, was the last trading day of the October 2008 contract and seems like it was expiration day short squeeze corresponding to oil's largest one day change ever as discussed in this article.

It’ll take some time to digest that data so I’ll get back to you if I have any questions on that. But what I was referring to were the futures contracts between months. Shouldn’t December or November oil futures go down while August remains unaffected?

Arch 

It’ll take some time to digest that data so I’ll get back to you if I have any questions on that. But what I was referring to were the futures contracts between months. Shouldn’t December or November oil futures go down while August remains unaffected?

Well if you go back to last Monday, thats exactly what happened, August dropped 21c, but Oct/Nov/Dec/Jan all dropped $1.60+. So the spread widened because Oct on back dropped primarily on the Trump/Saudi news, and not because Aug rose in price.

SMCJB 

Being long Dec would have hurt, but August - which is what most trade - was unaffected. As @Devil Man said "should have little effect on crude price, it takes a lot to ramp up production to those levels", it also takes weeks for the that additional production to get anywhere. The same is not true of the Canadian Syncrude outage. The effects of that are instantaneous. Whats amazing though is that Canadian Imports were really high last week - contrary to what you would expect with the outage.

August oil futures were down 2.35% in the first 5m bar after weekend open . End of story ... I have no idea what you are talking about