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The CL Crude-analysis Thread


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The CL Crude-analysis Thread

  #2611 (permalink)
Symple
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@SMCJB

Your statements are certainly debatable and thanks to post them. They are to be seen in the area of fundamental analysis. Only as noted in my posting: It is first and foremost about decisions in this fields:

"Thus, it is not the demand that is the reason for this decision, but rather the changing geopolitical situation in the world.

Symple

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  #2612 (permalink)
 
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 blackgrey45 
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Hi, I am interested in Russian oil. Are any countries in Europe or North America still buying Russian oil? I have read articles with mention of China and India being buyers for Russian oil. What price are these countries buying Russian oil right now and is anyone else buying Russian oil?

Other than the questions above I think the OPEC cuts last week will prove to be the start of a bearish move for the crude oil market. I know CL moved up on the news last week but I think the OPEC cuts occurred because OPEC was trying to get ahead of shrinking demand. On the charts there is about a $3.50 gap on April 4th. I think the market will close that gap.

Blackgrey45

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  #2613 (permalink)
Symple
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@blackgrey45

Whos-Been-Buying-Russian-Fossil-Fuels-Mar-1


Source: https://elements.visualcapitalist.com/the-countries-buying-russian-fossil-fuels-since-the-invasion/

About how much each country has to pay for a barrel? Think about this: G7 Russian Crude Price Cap at $60 a Barrel To find out about each other countries, you may do the research with any search machine.

Symple

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  #2614 (permalink)
 
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 blackgrey45 
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blackgrey45 View Post

Other than the questions above I think the OPEC cuts last week will prove to be the start of a bearish move for the crude oil market. I know CL moved up on the news last week but I think the OPEC cuts occurred because OPEC was trying to get ahead of shrinking demand. On the charts there is about a $3.50 gap on April 4th. I think the market will close that gap.

Blackgrey45

Quoting myself here. CL has fully closed the gap formed on April 4th after the OPEC cuts. I think a 69 handle is very doable in the next two weeks.

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  #2615 (permalink)
Mysterion
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Hey everyone!! New CL trader here. Is there anywhere where I can find which events impact the CL movement the most? Which news events/reports impact the price the most? Thanks for any help!!! :-)

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  #2616 (permalink)
 
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 matthew28 
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Mysterion View Post
Which news events/reports impact the price the most?

The inventory report is the big one for crude traders. If day trading I would be flat before it as there can be an immediate large moves at the release.
During holiday weeks when Monday is a US holiday, the report moves from 10:30am ET Wednesday, to 11:00am Thursday.



https://us.econoday.com/byweek.asp?cust=us

You do not win as a trader, you just get to play again the next day. If that game doesn’t appeal to you then you should not trade. Gary Norden
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  #2617 (permalink)
 
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 SMCJB 
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Which US Crude Oil Benchmark?

The CME's recent report on "Why Cushing Matters:- An update on the WTI Crude Oil Benchmark"
https://www.cmegroup.com/education/articles-and-reports/why-cushing-matters-a-look-at-the-wti-benchmark.html

ICE's recent presentation on "Insights into Midland WTI, and an update on the inclusion into the Brent Complex" which could have been named "Why Cushing is getting less important!"
https://www.ice.com/publicdocs/ICE_MIdland_WTI_AGC_HOU_Presentation_COQA.pdf

While the ICE "HOU" contract may be a better risk hedge for the Oil Industry, the reality is CME "CL" has 40 years of History and trades 800,000+ contracts a day, which is a dominance that will be hard to break!

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  #2618 (permalink)
 
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A bullish hypothesis Twitter thread. While I did "lean" towards being a non-believer in the China re-opening bullishness, and 'leant" towards believing everybody focus's on supply and not demand I did find this thread very interesting with no obvious flaws. But then I don't trade flat price, and won't be any time soon!



1/n This #thread will argue that a unique set of historical contingencies has obscured a looming problem for the #oil mkt, one which has been *delayed* by unprecedented events & interventions but not negated. We believe that in 6-8 wks the mkt will be subject to extreme turmoil
/2 RECENCY BIAS: one can hardly read an article on oil w/out being told of crude’s supposed ‘weakness’ since last June’s highs, often accompanied by de rigueur chart crimes showing month-after-month of lower prices. These charts, of course, cherry-pick a ST price spike to make
/3 the case that Demand has somehow collapsed. This is nonsense & ignores the extraordinary SPR maneuvers that were employed in the wake of Russia’s invasion. Simply put, if ~600k b/d are dumped from the SPR, oil prices should drop, & they did. Extra SUPPLY. 222mm bbbls. Historic
/4 But there’s an elephant in the room: if Demand were really *that* terrible & you dump that much oil on the mkt, we know from March 2020 what happens. Prices would get obliterated. That’s not what unfolded, though. $80 Brent is not consistent w/ a Global Recession. Never was.

/5 Oil would be much lower if the econ had truly crumbled. But it’s not, for a reason.

SIGMA SIGMA SIGMA

In March, when a rates-driven Bank Panic arrived—*not quite ex nihilo, but not widely predicted, either—the pain for certain Macro & Commodity HFs was swift. Over a 4-day
/6 span, successive 3-Sigma rate moves forced prominent oil mkt participants to dump financial Length. If Rokos & Pierre A, eg, are forced to unwind at once, the paper oil mkt will unwind w/ them. Negative Gamma exacerbates the move & crude tanks. But one must ask: is a Black
/7 Swan rate event—at odds of ~50-million-to-one—synonymous w/ Macro economic meltdown? Not quite. That is, a forced de-leveraging & reduction in VaR by commodity-specific shops does NOT by itself mean that the underlying commodity is doomed.

OPEC-PLUS

One of the most common
/8 misconceptions about oil relates to #OPEC prod cuts. Namely, the attendant time-lag for cuts to hit EIA data. The physical oil mkt is slow-moving. A tanker loaded in KSA will take ~44 days to reach the Houston Ship Channel. Thus, cuts that ‘start’ on May 1st will not impact

/9 data until mid-June. This leads inexperienced pundits to prematurely pronounce that the cuts ‘aren’t working’ or won’t matter. These are amateur takes, & the key data to be watching rn is *loadings.* And these data confirm that the cuts are real & will print mid-June. Data,
/10 not guesswork.

MANDATORY SPR bbls

By end-June, the most recent batch of ‘planned’ SPR sales—26mm bbls—will wind down, just as the OPEC cuts begin to print. Herein lies the problem: Macro oil tourists have dumped Length & Shorted certain categories at the *exact wrong time.*
/11 Children playing in the sand before the tidal wave hits. Come late June, inventories will begin to draw at a rate that will force a Hobson’s Choice for the WH: drain the SPR further, risking political blow-back & burning powder in a non-election year; or sit idly by as the
/12 full extent of the Crude mkt’s imbalance emerges & oil spikes in 2H. Neither is appealing for the admin, but we think the mkt will be allowed to ‘run hot’ in the back half of ‘23. If it is, the likelihood of record-high crude in the coming months is non-negligible.

CHINA

/13 Oil Bears want the mkt to believe that Chinese Demand is lackluster & will remain so *indefinitely*. This, frankly, is naive. We have already seen that Xi will risk losing face—Covid-zero walkback—to prop up the econ & keep ppl out of the streets. And while there are v real
/14 issues w/ China & its property mkt, in especial, wrt to Oil Demand the needle is moving higher & not lower. In other words, it’s specious to suggest that China, alone, will be a material headwind to the point of suppressing *global* Demand, esp in light of India.

INDIA

The
/15 burgeoning population of the subcontinent, paired w/ an insatiable Demand for energy, will help propel the current (nascent) Super Cycle for oil—that so many have already written off. Indeed, within a matter of months the recent weakness for crude will be but a diesel haze
/16 in the Bhiwadi twilight.

Delayed is not canceled. Rates are not oil. Demand is not weak. And the path for crude in the coming months will be sharply higher. You can bet against it, but you’ll lose.

Thanks for reading, as always, DYODD. /end

#OOTT #oil #OPEC #EFT #Htown

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  #2619 (permalink)
 
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 SMCJB 
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Not sure this will help people trade CL but it may improve your understanding of crude fundamentals

May 8th 2023 - Insights into Midland WTI, and an update on the inclusion into the Brent Complex

ICE’s Global Head of Oil Market Research - Mike Wittner - analyzes the reasons driving activity growth in the physically deliverable ICE Midland WTI (HOU) contract. Underpinned by Midland-origin/Midland quality crude, and priced in Houston, Mike discusses why HOU is a simpler, more efficient, and more effective tool for hedging and risk management, and how it avoids the greater number of risks associated with NYMEX WTI Cushing. Mike also touches on the benefits of the addition of Midland WTI to the Brent complex.

Full Presentation attached.

Attached Files
Elite Membership required to download: ICE_MIdland_WTI_AGC_HOU_Presentation_COQA.pdf
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  #2620 (permalink)
 
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 blackgrey45 
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Looking for a pullback in crude for the short term. Crude up 12% since the June 28 low which has been a nice run for the bulls in the last 2 weeks. For the last year crude has been in a range of about 85 at the highs to support of about 67 at the lows. Almost every time the price has moved 10% in either direction there has been a retracement in the opposite direction of the same amount. Also the trading range of 67-75 since April could prove to be good resistance on the high end in the short term.
Also interesting to note are the fundamentals. Seems the OPEC/Saudi cuts may finally be affecting the price in the last two weeks. Maybe the economic engine in China is finally starting to roll again. I think bears will ultimately win out in the medium to long term. Russia is moving oil into Asia on the cheap and the US production is showing no signs of slowing down.

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