Huge Build in Crude Inventory

I'm new to trading oil so don't laugh at me..

I just realized I made a big mistake. I am long 4 controls of CL feb (cost 38.50)! I didn't realize there was a huge spread like that (I've never seen that before in Gold which is what I usually trade) and I couldn't explain the 10% drop yesterday.

Now I'm not sure what to do. I have a big loss, but support seems to be at $35. But then I read here about the capacity problems and I'm worried the price will drop further.

if you were in my position, would you hold the feb contract for a few more days or just sell it?
 
Quote from Anaconda:

Yeah, too bad all capacity is pretty much gone.

February should get interesting. This inventory build up is going to get dumped.

I don't know of the exact details of the situation, but I think that more oil will be delivered than capacity available. Some may have to start dumping in the physical market below the contract price. Just some random thoughts.
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Interesting "random thoughts." why would the inventory build get dumped?
 
Quote from rubibond007:

Crackies.jpg



the RBOB y Heat Spread are in a Bull Rally, Most refineries will profit from this.
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Thanks!
Anyway of getting a web-link to this?
:)
 
Another huge build in CRUDE!

+6.22 million barrels.


also have to contend with API numbers that now come out the night before Wednesday's Energy Dept. report.

the API said crude-oil stockpiles rose by 800,000 barrels last week.
 
API announced today at 4:30PM EST that crude oil inventories saw yet another BUILD, this time of 8.1 MILLION BARRELS, far exceeding the expected build.

Wow!!!
 
Quote from ByLoSellHi:

They may have to start storing this stuff in the ground!!!


:D
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There is a substantial amount of floating storage. With the Baltic Dry Index at all time lows and crude futures in contango, big traders are buying spot crude, leasing cheap tankers to store it in, and selling the futures contracts.
 
Quote from ByLoSellHi:

They may have to start storing this stuff in the ground!!!


:D
More...

They already are.
Many oil patch stripper well pumps in the US turned off. Good time for maintainance anyway. Oil low, weather not broiling.
 
Landis, do not put any faith in the API #'s, nobody in our business uses them anymore. There are no reporting requirements, and the data is very spotty. Not trying to say there won't be another huge crude build in the DOE's, just saying that using the API's is like using stocktrad3r for advice.

Here are expectations from 3 diff sources-

EIA Weekly Inventory Change
(in millions of barrels)

RBS Sempra Reuters Bloomberg
Crude +2.3 +2.8 +3.0
Gasoline +2.0 +0.6 +0.9
Distillate -0.1 -1.3 -1.3
Refining Runs + 0.2% - 0.5% - 0.5%
Key 3 Fuels +4.2 +2.1 +2.6
 
Quote from TradinMadMan:

Interesting "random thoughts." why would the inventory build get dumped?
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Most of those who took delivery on the Feb contract are storing it with no intention of using it, just playing the calendar spread.

I think by the time all deliveries finish on the Feb contract, there will be guys without storage. So they will have to dump.
 
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