Friday , September 25 2020
Home / Tag Archives: wti curve

Tag Archives: wti curve

Eurodollar University’s Making Sense; Episode 4: Oil, Oil, Oil

  The debate over the shape of the recovery, “V” or “L”, which might emerge following the dislocation and global contraction. What clues can we find?   1. Domestic Data clues (The Two Easiest Dots Anyone Will Ever Have To Connect) “Deprive any animal of oxygen and watch how it doesn’t move very fast.” How the labor force changed right @ hardest part of GFC1, why it matters, what it means (workers just plain giving up) Up to then LF in recession was...

Read More »

Tidbits Of Further Warnings: Houston, We (Still) Have A (Repo) Problem

Despite the name, the Fed doesn’t actually intervene in the US$ repo market. I know they called them overnight repo operations, but that’s only because they mimic repo transactions not because the central bank is conducting them in that specific place. What really happened was FRBNY allotting bank reserves (in exchange for UST, MBS, and agency collateral) only to the 24 primary dealers. These were repos only between those entities and the Federal Reserve. It had nothing directly to do with...

Read More »

COT Black: All The Trades Are Crowded Here

Watching the crude oil market over the past few months has been a study in winding a rubber band, or a game of chicken. Each week it has been largely the same thing repeated: oil prices gently rise, backwardation in the futures curve keeps deepening, Money Managers in the futures market bet on higher oil, Dealers bet even more against them. The massive short position built up by dealers has been further offset to a small degree by the oil producers themselves. With inventory declining,...

Read More »

Huge Crude Stakes

There is a titanic struggle going on right now in the oil market. On the one side of the futures market are the usual pace setters, the money managers. Last week, the latest COT data available, they went the most net long since March. If it continues, it will close in on the most positive futures position since the record long they established back in February. Normally that would be insanely bullish for oil prices. But just as in February/March another part of the futures market has...

Read More »

COT Black: Crude Balance Here?

Oil prices have had a very good run for several months now. Dating back to the recent low reached June 21, WTI is up an impressive 35% to a new two-year high. Crude hasn’t traded at $57 since June 2015. During this latest increase, the oil futures curve has finally achieved backwardation (which isn’t necessarily permanent). The long-awaited normalization is as of now nearly complete. There is still some contango lingering in the front months, if only through the April 2018 contract (the Dec...

Read More »