Oil Manipulator Named: Gustav
By Brad Zigler
Oil prices have ratcheted up nearly $3 per barrel over the last two trading days as Tropical Storm Gustav gathered strength and set a collision course with America's offshore oil patch in the Gulf of Mexico. Energy companies began evacuating crews from Gulf drilling platforms on Wednesday as the storm bore down on the region.
Forecasts call for Gustav to reach hurricane status on its way to the Gulf, with the potential to shutter production in an area that accounts for a quarter of U.S. oil output. Gustav's likely to generate Category 3-level winds of 111 miles per hour before making landfall on the Louisiana coast by Monday or Tuesday.
NYMEX October crude oil closed near session highs at $118.42 per barrel Wednesday as traders focused on Gustav's potential to disrupt supplies. The psychology in the trading rings, however, has changed significantly since oil's July peak. Gustav may not pack the wallop it might have had if it arrived on-scene just a month or two earlier. Back then, news of an imminent Gulf hurricane would likely have sent oil up the daily trading limit of $10 per barrel.
The oil market's near-term quarterly contango, however, was snugged up 25 cents per barrel to $1.25, indicating that some supply pressure is being felt.
Oil Inventories Vs. Backwardation/Contango
On Wednesday, an Energy Department status report showed U.S. commercial oil stocks dipping by some 100,000 barrels last week, surprising oil analysts who'd been banking on a 1.1-million-barrel increase. Refinery utilization stepped up nearly 2% last week to 87.3% of operable capacity as gasoline production rose to an average 9.2 million barrels per day. Daily production of distillate fuels, including diesel and heating oil, however, fell to 4.4 million barrels
Gasoline stocks fell 1.2 million barrels, much less than oil patch experts' forecast of a 3.2-million-barrel decline. The consensus call for a 400,000-barrel increase in distillate fuel inventories was also off as stocks remained flat.
The nearby crack NYMEX spread widened by 30 cents per barrel over the past week, nudging up refining margins to 7.5%. A year ago, margins, at 15.3%, were twice as fat.
NYMEX Spot Crude Vs. Refining Margins
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This article has 1 comment:
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PAUL&$HARK
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3 Comments
Aug 29 07:50 AMWhen I first traded CL since 2000 my friend Shay told me:Do you want to make millions from zero? I said of course!,then he told me to buy CL for December 2008 for I think 13-14$ when 2000 CL was trading at around 22.He told me to buy 1 futures contract and each 10$ up to double,today I would have 8192 long CL.I don't even know what the value of it would be today (11,878,400 USD? but I think more) as I am not a mathematician and don't waste your time counting it or replying about margin call at some bigger fluctuation I would have,but I would never have a margin call going the way he told me as doubling each 10$ up would not put me on a margin call.Doesnt't matter,I just wanted to give this example and show to all traders out there that IT IS POSSIBLE TO MAKE MONEY TRADING.
Now regarding today's CL prices according to your research,CL futures for December 2016 are the same as spot price,I don't know what it means as backwardation or contango are easier to read,but my gut says that the best thing to do when nobody knows what to do (even biggest traders of CL are not sure how to price December 2016 Crude Oil) so the best thing to do is ........Crude Oil.
Here I must stop,why I must share my understanding of future price move for CL with anybody,who are you all here?Do I know you?I will share this only with people whom I know personally and with whom I make a handshake,who's hands and soul are clean and pure,I would not share my secret with some greedy speculator who will make money on my knowledge,let everybody do what he likes,let all those I don't know and will never see in my life make or lose billions,I don't care.If somebody of you can prove me that one is a good hearted person,then please post your comment here with e-mail to contact,I will consider everybody's request and the most I will help people who lost money in futures,this is my priority to make a good person happy again and bring him/her back on top.