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CL escaped the teens today with an afternoon rally off of $19.95. Closed at $20.82. However, the daily chart is still mombo ugly.

Anyone notice the dramatic PA when the Market-On-Close (MOC )report is issued at 15:50 pm ? Today we spiked to the HOD at 2848 and then immediately sold off 13 points on the ES.

You were robbed. Sucks.

NQ just made daily highs....ES about 6 pts away.

CL (WTI) down 7% now under $21. Oil market totally disconnected from the equity markets. I expect our government to make an announcement soon..... something like expanding the SPR (Strategic Petroleum Reserve) to spark the market.

CL has gotten a bid here as every dip has been bot since the 8:30 am lows of 21.13. Now painting 21.85.

https://www.elitetrader.com/et/threads/front-month-pricing.343198/

https://www.elitetrader.com/et/threads/front-month-pricing.343198/

Thanks Schizo. This concept was contradicted in the ES Journal today.

As we all know, the basis or premium of a futures contract is composed of storage, financing, and supply/demand projections. I just want to ask this one related to front-month pricing: As the front month gets closer to expiration, the front month price gets closer to the spot price for the given...

Yes, we had discussed this. The June contract reflects future supply/demand changes as well as production-level cut-backs. Of course the premium will come in as reality sets in on the market and we get closer to the June expiration date....and a much lower spot rate.

CL was pretty much straight down for the day, but stayed off it's low of 22.03. Every rally was sold. Seems to be comfortable in the 22's. This is a long way off from OPEC's 30's target.

I am not talking about settlement of existing contracts. I am talking about the pricing of the front month contract. There is a supply and demand component to the basis (or premium) of that futures contract. The closer we get to expiration, the more the spot price reflects true supply and demand...

Of course. Contract prices move towards spot as we get to expiration.

Correct. The market is expecting the spot price to recover at least $7 by June expiration. That would put it around $30.

CL has painted a high of 24.74 today. PA has been pretty much straight down to the mid-22's level. It's gonna take a lot more than a $10M BBL cut to keep oil inventories in check. Once inventories are full, look out below.

CL range-bound for the day. Now struggling to hold the 22.90 level. I heard the Saudi's are hoping for a 30 handle after the 10 million BBL cut-back takes place....that's gotta be really funny.

Crude down nearly $1 past hour.....struggling to stay in the 23's.

I think the market is acknowledging that was a weak deal.

Who is this guy named Max and how did he lose $250k ?