Crude is screwed, man.

Maverick74 said:
You model the forward curve to trade the forward curve, not the front month. The front month is driven by the delivery process into Cushing. There are many factors one could look at to try to understand it but it's largely noise.
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Could you possibly show an example of this curve on a graph/chart and show how we can profit from it?
 
helgen_1 said:
The last hour in crude was great. Glad I was watching my ladder. You sure as h*ll didn't need any forward curves to trade that.

H.
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Yeah...What was with that sudden $.60 jump in price over the last 90 minutes? A whole bunch of shorts covering? Renewed confidence in long holds?
 
Not a great believer in trying to understand why price moves. But there were two bullish news items today:
- OPEC members achieve 94 % of pledged reductions in February.
- White House denies rumors on ethanol mandate changes.

H.
 
Lie after lie after lie. I pity you that you can't pick yourself up and stand corrected on a simply mistaken belief. Instead you put words in my mouth I never used. You put up lies about my claims and twist the whole story. Shame on you @Maverick74. I value your other contributions but here in this thread you displayed your pride and arrogance in not being able to admit wrong. A pretty serious character flaw when it comes to trading.

I made my position clear in much detail and will not further entertain your drivel in this thread. Seriously, @Maverick74, it's highly disappointing to see someone who not only cannot admit being wrong but instead now fabricates lies and twists what others said in order to be seen in a better light.

Maverick74 said:
You seem to not know the difference between "prediction" and "value". I have no idea why. The curve in energy is instructive on whether its optimal to sell into the spot market or sell forward. The curve is absolutely a representation of the economics of storage. It's a real price. This implied price of storage reflects the supply and demand imbalance in the market and yes, it's almost exclusively what energy firms model, NOT PRICE. Of course you laid the claim that energy houses like Vitol are just BSDs that profit on wild swings in the market. You made the claim that inventories don't matter. You then ranted for hours about the no arbitrage rule which ONLY holds under equilibrium. And it's ONLY available to holders of physical assets which is EXACTLY how firms like Vitol make their money and it's WHY they have made money for 50 years straight because surely if they were just punting on direction, they would have to get "unlucky" every now and then.
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You are seriously claiming the front month contract in crude is primarily driven by delivery details into the contract's specified delivery locale and not by weather, pipeline blasts, strikes, political agreements or the breakdown of agreements, storage levels,..?

Are you seriously completely mislead by a bad book or someone or was this a joke? I don't know which one but you keep on dishing up utter garbage.

I am out of this thread because my tolerance level for more of your secret sauce on oil is reached.

Maverick74 said:
You model the forward curve to trade the forward curve, not the front month. The front month is driven by the delivery process into Cushing. There are many factors one could look at to try to understand it but it's largely noise.
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Overnight said:
Could you possibly show an example of this curve on a graph/chart and show how we can profit from it?
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2nlwx9x.jpg
 
helgen_1 said:
Not a great believer in trying to understand why price moves.
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I can empathize. EIA reports in particular. Refineries running at 86% capacity, upper limit seasonal inventory levels of Crude and Gasoline and the spot won't come off. As you pointed out, if the news doesn't seem especially bullish but the market is taking out offers that price action itself is strong and like you said the best option is to step out yourself and pick up some inventory for a quick flip.

But with average daily trading ranges hovering around a dollar and change the vol is really low the past several weeks as Mav suggested.
 
bone said:
I can empathize. EIA reports in particular. Refineries running at 86% capacity, upper limit seasonal inventory levels of Crude and Gasoline and the spot won't come off. As you pointed out, if the news doesn't seem especially bullish but the market is taking out offers that price action itself is strong and like you said the best option is to step out yourself and pick up some inventory for a quick flip.

But with average daily trading ranges hovering around a dollar and change the vol is really low the past several weeks as Mav suggested.
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Option vol is at decade lows. Actual stat vol is almost non existent. But spreads are moving! Man are they moving.
 
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