Cushing predicting another crash in oil prices?

bone said:
My sense is that if indeed as your previous posts suggest you are considering bets on Crude Oil based upon storage inflows and outflows at Cushing, Oklahoma - you have a very limited understanding of the North American Crude Oil Basis. If a card game allows you five cards - why tell the dealer to stop dealing at one card?

I've seen CL trade in a 15% trading range with Cushing Rack Space remaining relatively constant.

If you are truly going to take on smart informed risk based upon storage then I would suggest you do the fundamental work because Cushing does NOT drive the market. In fact, many hydrocarbon experts would argue that Midland, Texas storage is more important than Cushing ! There are some other biggies that I can point you to in terms of Continental North America: Hardisty, Alberta. The Gulf Coast. And pipeline outages.
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Have you compared Cushing inventories to the oil price?

It's pretty astounding how well it coincides to predicts. We'll see if its perfect record remains intact if Cushing inventories continue to spike, and oil collapses within the next couple months or so.
 
Error Correction Funder said:
Have you compared Cushing inventories to the oil price?

It's pretty astounding how well it coincides to predicts. We'll see if its perfect record remains intact if Cushing inventories continue to spike, and oil collapses within the next couple months or so.
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What are you calling a collapse? A 3 pt pullback? LOL. If that is the case then ironically we are in agreement. The problem I have with many people on ET is the constant use of hyperbole. What many ETers call crashes are like normal down days or weeks. Oil has made 100% moves in a single session.
 
Cushing, Oklahoma accounts for 13 percent of U.S. crude oil storage. It just happens to be the specified physical delivery point for a popular futures contract of which maybe 99% gets offset prior to expiry. You know nothing, Jon Snow. :D
 
There are some very unique quirks and idiosyncrasies that are specific to the energy markets - many of them are legacies from decades ago that are far less relevant than they used to be. As I mentioned previously, Cushing OK happens to be the specified physical delivery point for a popular futures contract of which maybe 99% gets offset prior to expiry. A whole lot has changed with the North American hydrocarbon market since the time NYMEX formulated the WTI contract specs. In fact, several years ago, there was talk in Houston about the requirement for Cushing delivery to be modified as it was outdated and getting more and more irrelevant.
 
bone said:
There are some very unique quirks and idiosyncrasies that are specific to the energy markets - many of them are legacies from decades ago that are far less relevant than they used to be. As I mentioned previously, Cushing OK happens to be the specified physical delivery point for a popular futures contract of which maybe 99% gets offset prior to expiry. A whole lot has changed with the North American hydrocarbon market since the time NYMEX formulated the WTI contract specs. In fact, several years ago, there was talk in Houston about the requirement for Cushing delivery to be modified as it was outdated and getting more and more irrelevant.
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To your point earlier, the CME is actively trying to launch a Midland WTI contract. There is obviously already a swap from WTI-Midland that trades as a differential that is very active in the physical market, but CME wants to have a standalone futures with Midland as the price marker.
 
If you truly want to do a deep dive into US Crude Oil Storage, you need to start with a high dive from the top platform into the EIA PADD data. Any hack journalist or market blogger can quote Cushing - it's easy. It's also incomplete at only 13 percent of U.S. storage.

The sources that do the deep dive into all the EIA PADD data you pay for (Platt's comes to mind). Like a pretty fetching blond sitting at a bar, any physical trader glances his lusting eyes first at the Gulf Coast region. (That's where all the refineries are. You can't dump unrefined light sweet crude oil directly into your Porsche GT-3.)

The PADD data does not include Hardisty, Alberta - which is a big deal quite frankly. Remember all the political controversy surrounding the Keystone XL and the Dakota pipelines ? That was all about getting oil from the Hardisty, Alberta terminal to U.S. Refineries without paying Warren Buffett's RailRoad his ransom.

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