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Tag Archives: crude oil

Platts market on close shows commodity markets functioning despite COVID-19

A key question for any market during times of uncertainty and volatility is what is happening to liquidity? Over recent weeks commodity prices, and particularly oil markets, have seen unprecedented volatility. Although the forward view may become clearer, there is still huge uncertainty around fundamentals in the months ahead. S&P Global Platts has a unique insight into several key commodity markets through its Market on Close (MOC) assessment process. The MOC is the core process through...

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Deflationistas About To Go Apeshit Over The Collapse Of Oil Prices

The Saudi-Russian Oil War is going to set the deflationistas hair on fire.  What is wrong with the relative price of oil collapsing? A big flop in the price of a headline commodity almost always brings out a deflation panic.  We have yet to see any sustained general deflation in our lifetime, however. Yes, the price of big-screen televisions is tanking but rents and health care are screaming higher.  Furthermore, we have a strong conviction that the price inflation is under measured. ...

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The Black Curve

The WTI futures curve is supposed to be in backwardation, though the word “supposed” is a loaded term. Backwardation is more of an ideal condition than one you might find most often in practice. There’s almost as much contango as backwardation in the futures market’s history. It’s not so easy to balance all the complexities that are spun through oil futures prices. For the unfamiliar, backwardation is when there is no reward for storing crude. If anything, storage is being punished and...

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Commodity Tracker: 6 charts to watch this week

As the global coronavirus (COVID-19) case toll rises, what can Chinese refinery activity reveal about the state of oil demand? S&P Global Platts editors examine this and other energy and commodity market trends, including Asian bunker sales, Americas corn exports and more. 1. China, crude and COVID-19: are low prices the best cure for low prices?     What’s happening? The COVID-19 outbreak and resulting economic slowdown has seen refineries slash their run rates, impacting...

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Venezuela, Rosneft and US sanctions complications: Fuel for Thought

US efforts to starve Venezuela’s Maduro regime of oil revenues have substantially increased the role of Russian energy in the US Gulf Coast, an outcome the Trump administration likely never anticipated when it put sanctions in place over a year ago. The situation has created a significant shift in product flows into Gulf Coast refineries and appears to have complicated the Trump administration’s plans to increase pressure on Venezuela, including plans to sanction Russian state oil Rosneft,...

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COT Black: German Factories, Oklahoma Tank Farms, And FRBNY

I wrote a few months ago that Germany’s factories have been the perfect example of the eurodollar squeeze. The disinflationary tendency that even central bankers can’t ignore once it shows up in the global economy as obvious headwinds. What made and still makes German industry noteworthy is the way it has unfolded and continues to unfold. The downtrend just won’t stop. According to Germany’s deStatis, factory orders in December 2019 were down sharply yet again. And it doesn’t matter how you...

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The crude oil spectrum: Platts periodic table of oil

The global oil market is brimming with a smorgasbord of crudes, from the Canadian tar sands extracted with the help of steam and sand, to the lightest US condensates whose color mirrors a glass of fine white wine. Each crude stream possesses its own unique characteristics, and when refined yields varying proportions of different refined products. Understanding crude quality has never been more important, following the dramatic rise in US shale output, which has transformed the composition of...

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Will The Last 2-Weeks Of 2019 Be The Inverse of 2018?

Every professional investor knows that month-ending, quarter-ending and year-ending timestamps are important. Throughout the year, positions are hedged against these timestamps, and as a result, the year-ending option expirations almost always have the highest open interest. Generally, the higher the open interest the greater the volatility and financial risk. Last December, in and around the final option expiration of the year, the S&P 500 fell by nearly 300 points. This dramatic...

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More and more West Texas crude heading Down Under

The US is quickly becoming a top supplier of crude for Australia, with the first full laden VLCC with WTI en route to Australia. Like a microcosm of the overall US crude oil export growth phenomenon, Australian refineries are increasingly importing crude oil from the US, quickly making the it one of the main suppliers for the island continent. Through July this year, Australia imported 75.55 million barrels of crude, with just 1.83 million of those barrels, or 2.4%, coming from the US. But...

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Powell’s Strong Economy Canceled By Powell’s Data

US Industrial Productions continues to more and more resemble the worst of the Euro$ #3, that “manufacturing recession” of four years ago. Back at the end of 2014 and lasting well into 2016, IP was led lower by the oil crash among other problems. They called it a supply glut but we all know that wasn’t ever the case. What changed was demand, and the lack of sufficient demand caused production to eventually plummet. In other words, one of the only parts of the US economy that had been actually...

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