ES Journal - 2019/2020

[Picaso]

Out 37.50

+1.50

If I may ask, how did you get 39? Were you sitting on it? Nice entry.

 

[speedo]

See if it's more aggressive at the upper TL than it was at the lower

 

[schizo]

This means if you have space to store crude taking delivery in May and selling June you can make $7 - storage charges - cost of capital without any risk.

It also means we have run out of space to store it

If it were that easy. Sadly, contango arises out of desperation.

 

[hafez50]

Thanks Darth. So why would someone pay $7 more for June oil when they can't unload it as there's no were to put it ? Also Spy wizard does June oil premium erode as it gets closer to may expiration?

 

[speedo]

Schizo, this is getting too tight for even you

 

[schizo]

Long 32

SL 29

 

[syswizard]

Also Syswizard, does June oil premium erode as it gets closer to may expiration?

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

 

[DarthSidious]

So why would someone pay $7 more for June oil when they can't unload it as there's no were to put it ?

Because they need it in June

does June oil premium erode as it gets closer to may expiration?

No. It's at a huge premium for a reason. Market has no place to store May delivery. It expects to have either use for it or place to store it come June

 

[schizo]

Long 32

SL 29

-3

 

[DarthSidious]

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

It does not. Please don't take your understanding of a market like ES with financial settlement and apply it to CL with physical settlement.

Edit: I will shut up. This a ES thread, not CL