Weeeee look at oil go, poor stock market

Ok fine, let's dispense with the silliness.

Now let's discuss the rbob bringing crude up theory a little more:

Notice the rbob futures are in backwardation while the cl futures are in contango. Also notice that tomorrow is expiration day for the current rbob contract which is at $2.1488 as I type, while the May contract is at $$2.0876 and has much more volume (4 vs 118 respectively)

Now, the front month cl contract is trading at $66.58 while the June contract is trading at $67.86
 
Quote from myminitrading:

I have been watching this pattern unfold what a perfect example of an inverse head and shoulder formation.
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I noticed the sharp 'V' bottoming pattern when it was at $50, and jumped in long (short term plays) @ that time.


orly.jpg



YA RLY!!!!!!


:cool:
 
Quote from stock_trad3r:

Oil is going to rapidly fall back to 60 once the Iran fears disipate. The top has been reached. Good shorting.
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When will the Iran fears dissipate?
 
Quote from TM1:

Ok fine, let's dispense with the silliness.

Now let's discuss the rbob bringing crude up theory a little more:

Notice the rbob futures are in backwardation while the cl futures are in contango. Also notice that tomorrow is expiration day for the current rbob contract which is at $2.1488 as I type, while the May contract is at $$2.0876 and has much more volume (4 vs 118 respectively)

Now, the front month cl contract is trading at $66.58 while the June contract is trading at $67.86
More...

So, correct me if I'm wrong, but you're basically saying the crack spread is narrowing, and refining margins are going to fall?

You're further stating that open call interest on higher crude is high, while open call interest on RBOB is low?

I need to hedge my VLO and my STO.


It is my general sense that crude will fall when this Persian Gulf tension eases, given that there really is not a fundamental shortage of oil (quite the opposite, actually).

I think these higher crude calls are based on pure speculation that tensions in the Persian Gulf may escalate, which is really a random flip of the coin.
 
Quote from TM1:

When will the Iran fears dissipate?
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The spike was caused by that incident regarding Iran firing at a US ship which was bogus.

Here are the top news headlines from yahoo. Only one story which is about the 15 British soldiers, which is old news and has no affect on the markets.

• Dems edge closer to showdown over Iraq
• Ex-aide contradicts Gonzales on firings
• U.N. urges resolution of Iran seizure
• Castro slams U.S. biofuel plans in first editorial since surgery
• Brownback backs Social Security accounts

Election 2008


• Middle class struggles amid Silicon Valley rebound
• April Fools' Day looms, but hoax expert says times are hard
• NCAA Tournament · MLB · NBA · NFL · NHL · Soccer
 
Quote from ByLoSellHi:

So, correct me if I'm wrong, but you're basically saying the crack spread is narrowing, and refining margins are going to fall?

You're further stating that open call interest on higher crude is high, while open call interest on RBOB is low?

I need to hedge my VLO and my STO.


It is my general sense that crude will fall when this Persian Gulf tension eases, given that there really is not a fundamental shortage of oil (quite the opposite, actually).

I think these higher crude calls are based on pure speculation that tensions in the Persian Gulf may escalate, which is really a random flip of the coin.
More...

I'll have to clarify; I'm merely saying that crude was not 'dragged up by gasoline'

The only reason the volume on the current rbob contract is low is because it's expiring, the same thing happens every month on all of the futures when expiring.

Yes the crack spread is narrowing, but we already knew that from watching the crack spread futures, but to keep it in perspective the spread is still nice and profitably high, both the May and June spreads are now above $20, however the April contract expired above $25 My opinion is that the refining margins should stay fairly healthy until sometime in August if we factor in hurricane and geo-political risks as the speculators surely will. A weak start to the hurricane season may lull traders into thinking the season will be a repeat of last year though.

The only real opinions I have concerning VLO is that a) They were individually pitiful last summer while refiners like MRO were doing well and b) I'd rather sell into earnings than after, but I'm sure you have your reasons for doing it the way plan to. Hedging the position while holding through earnings sounds like a good idea though.
 
Quote from stock_trad3r:

The spike was caused by that incident regarding Iran firing at a US ship which was bogus.

Here are the top news headlines from yahoo. Only one story which is about the 15 British soldiers, which is old news and has no affect on the markets.

• Dems edge closer to showdown over Iraq
• Ex-aide contradicts Gonzales on firings
• U.N. urges resolution of Iran seizure
• Castro slams U.S. biofuel plans in first editorial since surgery
• Brownback backs Social Security accounts

Election 2008


• Middle class struggles amid Silicon Valley rebound
• April Fools' Day looms, but hoax expert says times are hard
• NCAA Tournament · MLB · NBA · NFL · NHL · Soccer
More...


So do I understand that to mean the Iran fears have dissipated already? So I can expect to see $60 cl tomorrow?

I'll bet we see $68 intraday and settle above $67

I'll have to say that I obviously disagree and that I doubt the nymex guys rely on yahoo for their news feed.

Make no mistake, the speculators will not forget about the Iranians until those sailors are released, and by then a refinery will catch fire, the Nigerian rebels will get restless, etc, etc, etc. Not to mention that the Iranians are still haggling with the UN, and their abduction of the 15 troops proves that they are not afraid of the West...that worries crude traders.
 
Here's what I don't understand, though.

VLO has very healthy refining margins and has a high concentration of refining capacity in a very gasoline hungry portion of the country (west coast). Yet, they have not come close to their 52 week high, when TSO has already broached its 52 week high.

Do you know the reason why this is the case, TM?
 
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