josh 

With 8 DTE, June is down 6% today. Any opinions on the likelihood of a push lower in the coming week in anticipation of negative prices again as June expires? Or, has a lot of volume/OI moving to July reduced the probability of that?

Would think lower but been wrong for a week already!

JUNE CRUDE OIL MARGINS UP ANOTHER 20% EFFECTIVE WEDNESDAY 13TH MAY

Maintenance margin as follows (Initial Margins, ie non-member rates will be 110% of these)
Tier 1 / Jun20 increasing from 10000 to 12000, +2000 or 20%
All other tiers unchanged - I think everybody is telling you not to trade June.

https://www.cmegroup.com/notices/clearing/2020/05/Chadv20-193.html#pageNumber=1

And if you don't know John is a now retired Natural Gas trader that turned a $5 million bonus into the $4B hedge fund "Centaurus" and a personal wealth in excess of $2B. Also famous as the the guy on the other side of the Amaranth blow up.

Just posted this in the negative price thread. I double post incase there are people not following that thread. If everybody is following that thread, and don't want to be double post, just let me know and I can stop.

SMCJB 

I agree with @SunTrader. One of the interesting things about the surge in onshore fracking is the debt level associated with many of the drillers. I believe that a lot of the break even fracking cost estimates, which range from $40 to $60 barrel, actually include debt service. Of course the debt service is really a fixed company level cost rather than a well specific cost. So when you look at the cost of actually operating the well it can be considerably ($20/bbl?) lower. Another thing to consider when thinking about breakeven costs, is the cost to restart a well if you shut it down. In fact some wells can not realistically be restarted. So there are several reasons why producers might continue producing when it doesn't appear to make sense to. Interesting read... Reuters/Kemp :- U.S. commodities watchdog issues blunt warning over oil volatility https://www.reuters.com/article/us-global-oil-cftc-letter-kemp/us-commodities-watchdog-issues-blunt-warning-over-oil-volatility-kemp-idUSKBN22Q222 The U.S. Commodity Futures Trading Commission (CFTC) has written to exchanges, brokers and clearers in unusually forthright terms to remind them of their obligation to ensure orderly trading and commodity pricing. ... The Commission reminded futures exchanges they are legally responsible for preventing “manipulation, price distortion, and disruptions of the delivery or cash-settlement process”. ... Futures exchanges were reminded of their obligation “to monitor the convergence between the contract price and the price of the underlying commodity” as expiry nears. Even more pointedly, exchanges were warned they must “monitor the supply of the commodity and its adequacy to satisfy the delivery requirements”. In a reference to problems with the deliverability of WTI, exchanges were instructed they must make “a good-faith effort to resolve conditions that threaten the adequacy of supplies or the delivery process”. ... The letter notes exchanges have the power, among other things, to liquidate or transfer any open positions; suspend or curtail trading; and impose special margin requirements to ensure markets remain orderly and fair. ... The letter also contains several reminders to futures commission merchants (FCMs) of their responsibility to manage risks associated with their clients’ positions in futures contracts.

josh 

With 8 DTE, June is down 6% today. Any opinions on the likelihood of a push lower in the coming week in anticipation of negative prices again as June expires? Or, has a lot of volume/OI moving to July reduced the probability of that?

Options expired today. I wonder whether its going down now? M/N is -32c. We close to withdrawing from storage now!

Baker Hughes Rig Count Down 34 to 258
That's 425 in 8 weeks!!! (19, 40, 62, 58, 66, 60, 53, 33 & 34)

This is the lowest rig count since Aug 2009, and an approximate 650 rig drop from them end 2018 highs. At the end of 2014/beginning 2015 the rig count dropped almost 1000 from 1600 to 600 in about 6 months!

Does anyone *cough SMCJB cough* have any insight to what the storage situation is in Cushing right now and how it compares to last month?

Captain135 

Does anyone *cough SMCJB cough* have any insight to what the storage situation is in Cushing right now and how it compares to last month?

https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=W_EPC0_SAX_YCUOK_MBBL&f=W

AFAIK if you want something more up-to-date you'll have to pay for Genscape

Captain135 

Does anyone *cough SMCJB cough* have any insight to what the storage situation is in Cushing right now and how it compares to last month?

I hear conflicting things. I've heard claims that people can't find storage but then others tell me its still available. I don't know. Must admit I've got option bear spreads on so this isn't what I was expecting.

NotKenGriffin 

https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=W_EPC0_SAX_YCUOK_MBBL&f=W AFAIK if you want something more up-to-date you'll have to pay for Genscape

Actual stocks and storage availability are not the same thing. There are people that have storage booked that they plan to use for barrels for the balance on the month. Heard that there were some pipeline issues last week that may have contributed to the draw, but have looked for confirmation and can not find anything in the public media.