Crude Oil

VolSkewTrader said:
Brent crude was actually slightly higher most of the day, while WTI front month May got destroyed. The OPEC+ cuts are providing somewhat of a floor outside the US. But there were no voluntary cuts by US producers, so storage space is going to run out much faster in the US than anywhere else in the world. There's still too much WTI being produced, while there will be actual real production cuts by OPEC+ in Brent starting next month. So WTI is and will continue to underperform Brent as long as the US shale producers continue to blindly pump WTI out of the ground, while nobody needs it.
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Don't you think the storage problem was priced in at the latest after Trump said the US wouldn't cut/let market go? Should have been priced in back then, what has changed? I only see the Chinese taking less than expected Oil
 
I think market was overly optimistic and was pricing in a possible 20M bpd cut with the US sharing a good portion of the burden. They only got a 9.7M bpd with zero contribution from the US. All US production cuts have been involuntary shut-ins caused by market forces. So the less than 10M bpd cut with no firm commitment from the US was very disappointing, to say the least.

Market is quickly realizing that the desperate US shale companies won't stop producing until there's nowhere to store it, which could happen sometime in May.
 
Atikon said:
WTF just happend today? SA and Russia considering deeper cuts, 260 shale rigs down, Gov gives landlocked Oil Producers Storage but the Price take a 10% dive? Expecting more shale producers to be out of business by now?
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We've pretty much rolled over to June contract. Keep that in mind.
 
Read today, I forget where, that the Saudi's shipped big quantities to the U.S. in March and even bigger so far this month and bigger yet coming in May. The biggest refinery in the gulf (the U.S. gulf that is) is own by Aramco. So ....
 
Atikon said:
TankerTrackers.com do you use it? Is it worth it? I would consider subscribing if I could reduce the egde Hedge Funds have over me
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I actually used to be in the biz - Bowling Green downtown NYC. Long time ago. But on the dry cargo side.

But there are ways to track for free. Just a lot of little detail work that I can't be bothered with. Especially being a daytrader and all.
 
The next front month contract, WTI June (CLM20), has huge downside risk (20%+) if depressed demand conditions don't change. I read somewhere it could easy drop from current $25 to $20, since it will be the next month to have exaggerated contango as storage tanks fill up.
 
CRUD is following BCOMCL. BCOMCL has rolled over from May20 to Jul20 and in August will roll over to Sep20. And in October will roll over to Nov20. In my point of view this:
1- Reduces the impact of Contango
2- Reduces the impact if SPOT price goes negative in May or June (until third Friday of June)
3- If WTI only reaches 40USD by year end CRUD will get marginal profits
Am I correct in my assumptions?

What happens to JUN20 if spot goes negative? Is it worth 0USD?

At the moment JUL20 is at 24,24. If before roll over spot is at 30, does it mean that BCOMCL and CRUD will also see a 23,8% increase?
 
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