CL Redux

Quote from InvestVision:

so what it takes to sell April oil now and buy March month and take phisical delivery of march month and store it in a ship and deliver it at a month later.

seriously at $4500 per contract , if you have a 10k barrels ship rented it and after all the cost of say $1 for this one month it is a profit of
$3500 x 10k = $35 millions

seriously what is the math here.

why Goldman , Morgan stanly and all other big hedge funds can not do this ??
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Maybe there's not enough tankers to go around??
 
get one from europe/asia , all oil tankers are idle there as Brunt is trading $103 nobody is storing.
and we have still one month time to bring tankers as delivery is 1 month after the contract close.

deduct another $5 million for brining ships from far places
deduct another $5 million for financing ( interest paid on this huge money, you pay per barrel full money that is $85,000 for oil delivary )

... still $25 million profit .

This whole thing may not be as this simple as it sounds? if so market efficiencies won't let this happen.

one explanation is lots of this trading volume is intraday , if one started accumulating for eventual 10k contracts for MARCH ( and selling 10k for april ) the spread won't be at this level , spread may drop from $4.5 to $3 or below ..

@Kid will have some explanation as he is the YODA of this oil trading. Kid some thoughts please ...

Quote from schizo:

Maybe there's not enough tankers to go around??
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What a chopped out day. Indices are going nowhere in a hurry. Market's overbought and looking for a good reason to pullback IMHO. But we just trade 'em.
 
Quote from EON Kid:

please read Schizo's first post on real time posts for trades TY
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Apologies, I forgot i posted my long entry, hence the delay in posting the exit.

Will follow guidelines in future.
 
Quote from Visaria:

Apologies, I forgot i posted my long entry, hence the delay in posting the exit.

Will follow guidelines in future.
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Also, we don't believe you had 10 losers in a row this morning. We believe it was a shameless attempt to get us to feel sorry for you and send you Valentine's Day chocolates :p
 
Oil-storage trade

http://en.wikipedia.org/wiki/Oil-storage_trade

It has been estimated that one in twelve of the largest oil tankers are being used for the storage, rather than transportation of oil,[3] and that if lined up end to end, the tankers would stretch out for 26 miles.

http://www.zerohedge.com/article/oil-market-outlook-when-contango-trade-unwinds

Storage costs money, but how much? The U.S. EIA estimated holding
- crude oil would cost a company about $1.50 and $4.00 per barrel per year depending if it owns or rents storage.
( per YEAR , so for a month period it won't cost much )

- For gasoline, the costs would be $2 and $6 per barrel per year, or $0.01 per gallon per month:




Quote from InvestVision:

get one from europe/asia , all oil tankers are idle there as Brunt is trading $103 nobody is storing.
and we have still one month time to bring tankers as delivery is 1 month after the contract close.

deduct another $5 million for brining ships from far places
deduct another $5 million for financing ( interest paid on this huge money, you pay per barrel full money that is $85,000 for oil delivary )

... still $25 million profit .

This whole thing may not be as this simple as it sounds? if so market efficiencies won't let this happen.

one explanation is lots of this trading volume is intraday , if one started accumulating for eventual 10k contracts for MARCH ( and selling 10k for april ) the spread won't be at this level , spread may drop from $4.5 to $3 or below ..

@Kid will have some explanation as he is the YODA of this oil trading. Kid some thoughts please ...
More...
 
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