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’WTI squeeze theory gains ground
What flipped WTI so quickly and severely into backwardation?
Increasingly, a consensus is forming that it was nothing more than a short squeeze. We’ve mentioned this before, but here are some more thoughts from the analyst community on Wednesday.
Who’s been buying Japan like crazy?
Here’s an about-turn for the books:
That chart’s from Reuters, and according to the newswire, investors pumped a record $956m of new cash into Japanese equity funds in the week ended March 16.
The majority of those flows headed into the iShares MSCI Japan fund,
Commodity ETFs: even worse than you thought
The issue of rollover and contango decay in commodity exchange traded products has received a lot of attention in the media.
Bloomberg noted, for example, how many ETF investors were caught off guard when contango hit commodity markets this year — a situation which has eaten into the value of their investments due to the premium paid to maintain a futures position indefinitely.
Why JP Morgan’s new copper ETF may have a scouse exposure
JP Morgan threw its name into the physically backed commodity ETF race on Monday with the filing of a preliminary prospectus for a copper-backed product.
The SEC document, the first from a major new player preparing anticipating an entry into the market,
Considering a commodity investor’s break-even rate
Olivier Jakob analyst at Petromatrix notes on Tuesday that open interest in overall crude oil futures on both the Nymex and ICE exchanges reached an all-time high of more than 3m contracts last Friday:
A Vix curve ball
Things, it seems, are still looking a bit funny in the world of VIX futures.
Pragmatic Capitalism, for example, wondered on Thursday why it was that volatility futures were refusing to revert to the mean.
ETFs and HFT (redux)
We don’t like to gloat, but err, in this case we can’t help ourselves.
That’s because from the moment commodity ETFs like the USO and the UNG began acting weirdly in 2009, FT Alphaville speculated they were probably being arbitraged in some fancy fashion by a new breed of index arbitrageur,
HFT in commodity ETFs
When looking through the top holdings of the Powershares DB double long crude ETC, the leveraged commodity ETF that is about to be liquidated, we were intrigued to discover that the largest owner of units was one EWT LLC,
That commodity ETF effect, in grains
There’s been a spate of commotion this week in the world of commodity ETFs, or ETPs (exchange traded products) as they are fast becoming known.
It comes in the shape of a CFTC ruling that resulted in two Deutsche Bank PowerShares commodity funds,
Things looking ugly for the UNG
Last week, prominent oil-industry financier Matt Simmons, CEO of Simmons & Company International, weighed in on the UNG/commodity exchange-traded-fund (ETF) debate by posting the following missive to a handful of recipients:
Ice-y tactics in commodities
We just spotted Intercontinental Exchange CEO Jeffrey Sprecher’s view on ETFs in the commodity space:
Changes to Exchange Traded Commodity Funds May be Required
A recent phenomenon has been the emergence and growth of Exchange Traded Funds (“ETFs”) that invest in commodity futures.
Electronic trading and commodity prices
Yes, everyone — bar the old open outcry pit traders — loves electronic trading in commodities.
Ahead of this week’s CFTC hearings on position limits and speculator influence on prices, however, have the commodity regulators perhaps forgotten to question the obvious? That is,
UNG goes OTC
Bloomberg reports the United States Natural Gas exchange traded-fund, which has been buying Nymex and ICE natural gas swaps since at least the beginning of June, has now been pushed into the world of OTC bilateral swaps.
Cramer doesn’t get the UNG
Jim Cramer, the over-excited host of Mad Money on CNBC, has finally stumbled upon the problems affecting some ETFs – namely the United States Natural Gas Fund (UNG). And as can be expected, he’s outraged.
More weirdness in the UNG
The United States Natural Gas Fund (UNG) exchange-traded continues to mystify, this time by cutting positions over the last few days just when you would expect it not t0: that is, the day that natural gas futures soared by 8.43 per cent (see below chart).
The problem with commodity ETFs
The day ahead of the United States Natural Gas (UNG) ETF’s futures roll from the July to August contract, Olivier Jakob of Petromatrix — who has inadvertently become a bit of a lone crusader in the mission to expose the influence of exchange traded funds on commodity markets — presents an impressive summary of the story so far.
United States Oil Fund, redux
We noted on Monday to what degree the United States Oil Fund (USO) ETF had reduced its positions in WTI front-month futures since February and how that has coincided with a not disproportionate build-up in positions of the United States Natural Gas fund (UNG),
The curious case of ETF NAV deviations
It would probably be fair to say that since launching in the 1990s, exchange-traded funds — hailed as among the most innovative and attractive retail investment products of recent times — have caught the investing public’s imagination.
WTI back on top
Nymex WTI is back at a premium across the entire curve as of Monday.
What does that mean? In the first instance, it implies the Cushing issue has been resolved and that holders of “floating storage”
Beware the rolls of March
Oil-invested index funds like the Dow Jones AIG commodity index, the S&P GSCI and the United States Oil Fund begin to rollover their positions from the April front-month WTI contract to the May one this Friday.
Regulator probing USO oil ETF
The FT is reporting on Friday, along with all the other wires, that the CFTC is investigating the United States Oil Fund:
US federal regulators are investigating an investment vehicle that has amassed a 20 per cent stake in a crude oil contract traded in New York and London amid fears that its activities could be distorting the market.
Whatever happened to speculator limits on Nymex?
Stephen Schork of the Schork report highlights a response, as received from a reader, to his Wednesday point on the USO ETF:
A response to our USO observation from a client…
re: USO – they are NOT a hedger – why they are allowed to exceed the spec levels is beyond me – oh wait yeah NYMEX [now CME] and ICE love the volume and fees it gets from the USO trading…
A self-propelled pyramid?
Stephen Schork of the Schork report jumps on the United States Oil Fund issue on Wednesday. He too is blaming the size of the ETF for current distortions in front-month Nymex WTI contracts.
He refers specifically to the March/April roll when spreads moved from $3.26 to $8.18 and expired at $1.09.
The United States Oil Fund mystery
Olivier Jakob at Petromatrix continues his crusade against the United States Oil Fund in his Tuesday note, an issue increasingly being picked up across the commodities and investment spectrum.
Jakob’s specific case is with the distortions being caused in the WTI market on account of the ETF’s size and predictability.
Is WTI becoming an ETF derivative?
It’s rollover day for the March WTI contract on Friday. And the WTI disparity continues to hold, something analyst Olivier Jakob at Petromatrix increasingly thinks has more to do with the United States Oil Fund (USO) than any real fundamentals.