RSS feedcushing
’Bye, bye WTI-Brent spread disconnect…
Whoa…. look at that move in the WTI-Brent spread. That’s at least $4 worth of tightening in less than 10 minutes:
And what has caused this dramatic turn of events?
No less than this surprise statement from pipeline operator Enbridge declaring a reversal of the all important Seaway pipeline,
Goldman on who’s really wagging the oil market
If you’re wondering what Goldman Sach’s view on crude is — it can be summed up in one neat sentence from their latest research note:
The world crude oil market remains exceptionally tight.
The reasoning is pretty straightforward.
WGO – What’s going on in Brent-WTI? [updated]
First there was Cushing syndrome. Then there were Brent market antics. Now, nobody knows what’s going on in the Brent-WTI spread.
The difference between the two contracts has (once again) reached record levels.
Et in Cushing ego
Wow. Turns out that in 2008 (into the mega rally time period) someone may have been “squeezing” oil after all.
As the FT reports:
The US commodities regulator has charged a trading house and two individuals with manipulating oil prices in 2008 by amassing dominant positions in the physical market that created the impression of a shortage.
Bye, bye Cushing syndrome (possibly)
By now, anyone following oil markets will be familiar with Cushing syndrome. The one-way flow problem which affects the Cushing delivery point for Nymex WTI futures in Oklahoma preventing oil that’s gathered there to travel to alternative domestic or sea-borne markets where demand is higher.
WTI arbitrage is a PADD II windfall
There’s been some interesting commentary on Friday regarding the ongoing problem of the widening WTI- Brent spread, which struck a record wide in like-for-like basis terms on Thursday.
First this from John Kemp at Reuters,
A record WTI-Brent spread, a new paradigm
Here it is, the all time record spread between CME WTI front-month future crude and ICE Brent front-month future crude:
According to our assessment that’s a record on a like-for-like basis on both Bloomberg and Reuters terms (Reuters data quoting a slightly higher historical record from January 2009).
WTI’s upcoming ‘Keystone’ problem
If you thought the distortions in the WTI-Brent spread couldn’t keep going for much longer, you may be interested in the following.
TransCanada’s extension of its Keystone pipeline could see it pumping as much as an additional 156,000 barrels per day into Cushing,
More on the widening WTI-Brent spread
Reuters is running an interesting story on Thursday that throws further light on the widening WTI-Brent spread, which when we last looked was at $6.42 a barrel.
The newswire claims oil trader Hetco has taken control of the first eight North Sea Forties crude oil cargoes loading in February and two Brent cargoes.
On the implications of a widening WTI-Brent spread
The spread between the two main global oil benchmarks, West Texas Intermediate and Brent, is blowing out (again). And it’s been doing so for most of the month.
We’ve known for a long time, of course,
An unjustified WTI distortion?
JBC Energy has picked up on the ongoing problem of the WTI-Brent forward curve disconnect on Wednesday.
In a nutshell, while Brent futures prices have been jostling nicely into a flattish curve structure (and even a touch of backwardation at the very front end),
When Cushing syndrome strikes…
The WTI super-contango is back, which incidentally also implies the inevitable return of so-called ‘Cushing syndrome’ - a term nicely coined by JBC Energy, as it happens.
On Thursday, US inventory data showed that Cushing stocks — the delivery point for WTI futures – fell last week by 330,495 barrels to 37.6m,
The return of the WTI super contango
The WTI super contango is back — which means time to prepare for price distortions, offshore tanker storage buildup and the general return of evil hoarding oil spivs.
Mwa ha ha.
Okay, to be less sensationalist about it,
Cushing is full and time-spreads are collapsing
Commodities guru John Kemp at Reuters has again been focusing on full stocks at Cushing Oklahoma and the continuing widening contango, in his latest market commentary.
A bit of background: Cushing is the main physical delivery point in the US for Nymex WTI crude.
Oil contango intensifies as Cushing stocks soar
WTI front-end futures have experienced some extreme price volatility during the past two weeks due to distortions stemming from full-to-the-brim storage facilities at Cushing Oklahoma.
(Cushing is the main physical delivery point for Nymex WTI crude)
Moreover,
Is Cushing souring up the oil market?
Last week both Nymex and ICE began trading brand new oil futures linked to the Argus’ new Sour Crude Index — the ASCI.
The exchanges developed the futures in response to Saudi Aramco abandoning the Platts WTI benchmark in favour of the Argus sour benchmark back in October.
Oil, still fundamentally weak
WTI oil fell more than 5 per cent to $63 per barrel on Wednesday after US inventory data showed a much higher than expected build in crude stocks. Analysts had been expecting inventories to draw of 1.5m barrels,
‘WTI about as useful as a chocolate oven-glove’
As FT Alphaville has been reporting for weeks now, WTI has lost is losing its position as the global oil-price benchmark.
In case anyone still disputes the fact, Thursday’s WTI/Brent spread has reached a preposterous $9 dollars.
Record inventories at Cushing
The latest US stock data has just been released and it’s a whopper of a build at Cushing, Oklahoma- the delivery point for West Texas Intermediate physical barrels which set the WTI Nymex benchmark. The number is currently the most closely watched inventory figure because of the contango in the forward curve and the associated incentive to store crude.