Ron2008

Oil Inventories Working Their Way Back to Average Levels

If you included floating storage then you would be seeing a much larger difference in inventory. The amount offshore is huge compared to the past.

Oil Rebounds on Supply and Inflation Data

I don't know why anyone bothers to look at and repeat API data.

After Failing to Cruise Past $80, Crude's Stuck Around $70

"The winter months are upon many parts of the US, which means demand for petroleum based products for home heating and transportation will be on the rise."

Demand for oil products for transportation in the winter decreases not increases. This easily offsets the increased heating oil demand.

World Series of Crude Oil: Winner Decides Winter Gasoline Prices

Looking at the new DCOT report, the Manged Money net long percentage of total open interest is at its' highest level for the the entire 3+ years of data given to us by the CFTC. Even higher than it was in 2008.

In the last 3 weeks the Managed Money group has gone from 60,002 net long to 130,712 net long in crude oil. And not surprisingly, the price went from 66.71 to 79.09 on the day of the reports.

Managed Money is clearly driving prices.

The Manged Money group also added a huge 21,605 net longs last week in Unleaded Gasoline. Highly unusual for this time of the year.

What is the Goldman and JPMorgan game plan? Looks like going long right now. But that doesn't make sense to me. There are very few fundamentals to back up this latest rise. They are on their own.

World Recovery Is in the Hands of OPEC

The problem is you are treating oil as an asset class and not a commodity. Thus more dollars are chasing to the long side of oil than normally would.

If all of the specs who wanted to preserve the value of their wealth would buy precious metals, then you would have your safe haven and the economy wouldn't be ruined by the specs buying a commodity that affects the world to such a huge extent.

I hope you realize how big a "tax" the inflated prices of oil and gasoline, caused by your speculation, are to the US economy.

The US uses about 14 million barrels of oil a day, right now. If there is $20 of spec premium added to the price, that is a $280 million dollar per day "tax". $8.4 billion a month. $102 billion a year.

By speculating to preserve your wealth, you are on the other hand causing the price of everything you purchase to cost more. Are you really gaining anything?

On Oct 25 10:40 PM derryl wrote:

> The "wall of liquidity" that is chasing all asset classes, including
> commodities like oil, is interested not only and often not even primarily
> in making speculative gains. A lot of this money is just pension
> funds and ETF retail investors like you and me trying to preserve
> the value of our wealth as the dollar devalues. Yes this 'speculative'
> money holds the price of oil higher than oil market supply and demand
> would indicate, but how do you tell all those people that you're
> not allowing them to put their wealth into commodities to preserve
> it against devaluation? (I own oil stocks but not ETFs, though I
> sympathize with ETF commodity 'speculators')

Gasoline and Diesel Fuel Prices: Scaring Investors in Time for Halloween

Yes there will be decreasing imports, but there are zero signs of increasing demand. And today's jump up in prices will not help demand at all.

I fail to see how a report that said gasoline demand decreased was bullish for prices. But that is where the specs want it to go.


On Oct 20 01:27 PM ryanclarke wrote:

> If the dollar continues to weaken and gasoline continues NOT to be
> imported from oversees into the United States, the U.S. should experinece
> a rerun of the Fall of 2007. My prediction is the following: increasing
> gasoline consumption in the U.S. ( +9 MBPD ) should produce low levels
> of gasoline in U.S. storage within the next two months which should
> induce oil to at least $100/drum by next spring.

Oil Price Rises to Highest Level in 2009

$82 oil today. They are nuts.

Oil's Up and Down Ride

The Nov oil (CL) futures contract expires on Tuesday. The Nov options have already expired. You want the Dec or Jan contract.

The Jan CL options expire 12/16. A $75 put costs $3.57 or $3,570.
www2.barchart.com/optq...

On Oct 17 11:05 AM sethmcs wrote:

> I am itching to bet oil down from this level. Not sure the best
> way to do that. Buy puts on the November contract? Buy puts on
> USO or OIL? Could somebody more experienced in trading commodity
> options explain the ins and outs. I have 25+ years experience with
> equity options.

Oil's Up and Down Ride

Excellent article!

Goldman needs booms and busts to make money. They don't care one bit about the 16.8% they run into the ground.

Inflation Trade Breaks Out Across the Board

You're dreaming if you think we are headed to $150 oil in the coming months. If oil goes to $150, we will be in the next depression.

In order to have inflation you have to have demand. Since people are still getting laid off and not getting raises, where is this demand going to come from? Foreclosures just hit a new all time high.

There may be inflation on Wall Street but there isn't any on Main Street.

Oil: Three Month Roll Breaks the Buck

Or is the market realizing that the recovery will be far slower than they thought, so they are running out of buyers for the back months?

It's not lack of supply, it's lack of demand.

Why Pros Spread Oil and Gas

You didn't use the Jan contracts to do your chart? Then what good is it?


On Sep 29 10:00 AM Brad Zigler wrote:

> Historic figures arise from spot prices. To avoid the roll effect,
> though, retail traders ought to employ the January contracts in a
> "spread-and-hold" position. Forward contracts, too, qualify for a
> lower margin tier.

Flattening Oil Contango: Is It a Bullish Sign?

ryan, you are looking at the wrong number. That 3,167 is a lot more than just gasoline imports. Look at Figure 9 on your link. The gasoline imports are only 878.

Also your 18 mil barrels of crude needed to make 9 mil of gasoline is wrong. It only took 14.7 mil to make 8.9 mil for the Sep 18 week.

Gasoline isn't going to $4 in 3 months. If it does, then we will be in the Greatest Depression ever.


On Sep 24 10:57 AM ryanclarke wrote:

> The EIA data is available at www.eia.doe.gov/oil_ga...
> .
>
> Note in Table 12. U.S. Petroleum Balance Sheet, Week Ending 05/22/2009
> the value of Gross Product Imports (5) --- gasoline imports ---
> 3,167.
>
> Note the last EIA report listed the Gross Product Imports as 2,592
> .
>
> At the current price of about $2.50/gallon in the United States,
> refiners outside the United States that sell their product in Euros
> have no desire to export their gasoline. Thus, even with substantial
> crude stockpiles in the United States, I estimate their will be a
> shortage of gasoline in the United States ( stockpiles of gasoline
> below 190 MB before the end of the year ). This estimate is based
> upon a net decrease of about 500,000 thousand barrels per day gasoline
> imports into the U.S.
>
> The result is the following: If the dollar doesn't get 'strong' then
> gasoline prices will go back to $4/gallon in about three months.

Why Pros Spread Oil and Gas

Then why do my numbers not match yours?

On Sep 1, 2005, Jan 2006 NG was 12.467. Jan 2006 Crude oil was 70.41.
On Dec 12,2005, Jan 2006 NG was 14.841. Jan 2006 Crude oil was 61.30.

That's a profit of $32,850. Your chart shows a less than $10,000 profit in the 2005 column.

For the Jan 2007 contracts on the 2006 bar on your chart you show about a $10,000 gain. I show a $19,610 loss.


On Sep 28 10:01 PM Brad Zigler wrote:

> January contracts for both commodities.

Why Pros Spread Oil and Gas

Brad, in your article "What (Or When) Is Up With Natural Gas?" you never said what contracts (month) you were using to play the long NG and short CL spread. Which ones did you use?