All of this great info on crude makes me wish I knew more. Where can I learn about all things oil? Huge subject I know, but if someone wants to start on basics like how heavy vs light and sweet vs sour affect the potential to refine into things like gasoline, I'm willing to dig in a bit and learn, and would be most grateful.

josh 

All of this great info on crude makes me wish I knew more. Where can I learn about all things oil? Huge subject I know, but if someone wants to start on basics like how heavy vs light and sweet vs sour affect the potential to refine into things like gasoline, I'm willing to dig in a bit and learn, and would be most grateful.

Unfortunately I do not know of any good books or resources on crude oil itself. Petroleum Refining in Nontechnical Language is an excellent book on refining but it's become difficult to find. In simple terms Sweet vs Sour is Sulphur content. Sulphur is bad! Light versus Heavy is product yield. Light Crudes yield a lot of Gasoline, Jet, Diesel/Heating Oil while Heavy Crudes yield more Fuel Oil etc. Brent and WTI are both Light Sweet Crudes. The additional factor is Refineries. A simple refinery just processes crude. A complex refinery has additional units that can further process the original products to yield lighter products. All US refineries are Very Complex Refineries. As such they can take Heavy Crudes and still produce mostly Gasoline, Jet, Diesel/Heating Oil. This is why we are in the situation that we import so much crude (Medium & Heavy Crudes from the Middle East) but also export so much crude (Light Crudes mostly going to the Far East.). If US refiners had to use WTI as their primary crude intake, a lot of the refinery would end up being idle as the additional complex units would be underused.

More on the OPEC+ 'cuts'

And then this interesting story

Reuters/John Kemp :- U.S. crude oil storage is filling rapidly
https://www.reuters.com/?edition-redirect=uk

But a more severe constraint is likely to come from the refined fuels system, where storage capacity is lower and logistics constraints are tougher.

...

But once fuel storage is full, refineries will have no choice but to cut back crude processing, which will cause crude stocks to back up even more rapidly.

Of course this is why May/July is trading $12!

Baker Hughes Rig Count Down 66.
That's 245 in 5 weeks!!! (19, 40, 62, 58 & 66)

Rig count not been this low since late 2016. Currently at 438 still 122 above 2016 low of 316.

Getting back into futures and can't find my ATM Strategy and can't remember how to create...

Does anyone have one for trading 3 contracts on CL?

Maybe Sunday’s gaps will be more of an occurrence and I can “fly” back to mean - saw it on March 9th only with the July 1 Month fly


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Reuters/Kemp :- Hedge funds sense crude at turning point but not fuels
https://www.reuters.com/article/us-oil-prices-kemp-column/column-hedge-funds-sense-crude-at-turning-point-but-not-fuels-kemp-idUSKBN2221L8

Hedge funds were net purchasers of petroleum futures and options for the third week running last week as managers gambled that the market has already hit its trough.

Must say I am a little surprised.

SMCJB 

Did some work on this a few weeks ago. For the oil storage play your only interested in ULCCs/VLCCs, so your looking for companies that have the highest concentration of VLCCs in the their fleets that were not already booked out on time charters. DHT and EURN are good candidates followed by FRO and STNG. They all had big run ups when CL went to $20 but in the last week have given up all their gains and are surprisingly trading near long term lows again. I know crude has rallied but May/Jul is still trading $8. If your bold they all have options as well which all have implied volatilities over 100% Disclosure: I have long delta positions in all 4 names mentioned.

SMCJB 

My perspective was purely that with VLCC rates double medium term averages the pure VLCC plays should have much better earnings in the next 3-6 months. I agree once the surplus has gone theres nothing to support high rates.

Well I got this one right!!!

Since posting date (Apr 9th)

• DHT 6.52 -> 7.86 +20.6%
• EURN 10.32 -> 10.97 +6.3%
• FRO 8.78 -> 9.91 +12.9%
• STNG 17.41 -> 21.28 +22.2%
  [8]Average +15.5%

vs

• SPY 278.2 -> 284 +2.1%

Disclosure: Still have long delta positions in 3 of the 4 names mentioned.

FYI for anybody following this thread, there's a second thread getting a lot of posts discussing current negative crude prices. Wish it was all centralized here but oh well. But in case your not aware of it here it is...

Oil price negative? Oil price might fall into negative numbers Several sources are indicating the today very low oil price might fall to zero or into negative numbers. (see Bloomberg and other this month). The point is the crucial oil storage which is no longer there: …

MAY CRUDE TRADES $4.04 DOWN 78% ON DAY

From CME Globex Command Center

The following May 2020 Energy products (CLK0, HOK0, QHK0, QMK0, QUK0, RBK0, HCLK0, RTK0, WSK0, RLXK0, TCSK0, MPXK0, 23K0, CSXK0, 26K0) have no low limit and may trade negative.

If you have any questions, please contact the CME Global Command Center in the U.S. at +1 800 438 8616, in Europe at +44 20 7623 4747 or in Asia at +65 6532 5010.

The sender provided the following contact information.
Sender's Name: CME Global Command Center
Sender's Email: [email protected]
Sender's Contact Phone: 1 800 438 8616

The Q products are the mini's. WS is the financial bullet. HCL WTI @ Houston, not sure about the others off the top of my head.