Posts tagged 'Nymex'

Unstable commodities

Nymex WTI futures trade experienced somewhat of a wobble on Wednesday.

As Stephen Schork highlights in his chart of the day: Read more

Managed money goes LONG oil

The following chart comes via John Kemp at Reuters. And as he notes this one kind of speaks for itself:

 Read more

MF Global files for bankruptcy

There’s to be no last-minute deal to salvage MF Global: the futures brokerage and sometime European debt specialists filed for bankruptcy on Monday in New York. Click through to access the filing (H/T John Carney):

 Read more

Gasoline futures slide as US operations withstand floods

Gasoline futures slid on Monday, weighing on crude, worsening a rout in the motor fuel as southern US refineries kept up operations in the face of a flood, the FT reports. Nymex June RBOB gasoline, used to make petrol, dropped 14.33 cents, or 4.7 per cent, to settle at $2.9311 a gallon in New York. The contract has fallen 11 per cent in the past week. Retail markets have already begun to react, with the average price of petrol falling half a cent last week to $3.96 after steadily increasing since January. The declines reverse a rally in gasoline, which had outpaced crude amid falling stocks in the US and a historic deluge on the Mississippi river that threatened to affect output from refineries in Louisiana state.

There’s always a silver lining…(even in a commodity rout)

And on Thursday that lining was apparent in the gasoline market.

As Stephen Schork of the Schork Report noted on Friday: Read more

US traders use river transport to profit from oil glut

Barges laden with crude are set to make their way to the oil-rich Gulf of Mexico in the latest sign of how price anomalies have reconfigured energy markets. Petro Source Terminals, a storage tank operator, plans to start filling vessels with crude oil at the river port of Catoosa, Oklahoma, to sell to refiners in Louisiana, hundreds of miles downstream. The company is hiring barges because the price of West Texas Intermediate crude, the US oil benchmark, has been weighed down by record 40m-barrel stocks at its delivery point in Cushing, Oklahoma. On Wednesday, the price of Louisiana sweet crude was $127 per barrel, while Nymex June WTI futures were $111.90, having dropped 31 cents. Profit awaits traders who can sell WTI-linked oil in more expensive markets, but moving it out of landlocked Cushing is difficult. This week two companies, Enterprise Products Partners and Energy Transfer Partners, said they would build a pipeline to move 400,000 barrels per day from Cushing to Houston to provide an outlet for the “stranded” barrels. The project would not begin service until late 2012.

Stocks dip as traders assess Japan crisis

Global stocks are under pressure after shares in Tokyo plunged 6 per cent, while gold and Japanese government bonds jumped as the market coldly assessed the human and financial devastation wreaked by the earthquake, tsunami and nuclear crisis in the world’s third-largest economy, reports the FT’s global market overview. The FTSE All-World index is down 0.7 per cent, with many Asian bourses in positive territory. The S&P 500 on Wall Street is down 0.7 per cent, dipping below 1,300. There is little evidence of heavy flows into perceived currency havens, however. The Swiss franc is firmer, but with a gain of 0.5 per cent versus the euro, not dramatically so. The US dollar is weaker. Uranium producers lost ground over fears that a nuclear meltdown in Japan could reduce demand for nuclear energy worldwide. The yen has added to the gains it recorded on Friday when traders speculated that the Japanese unit would benefit from the repatriation of funds. It is up 0.2 per cent Y81.68 versus the dollar, compared with last week’s close of Y81.89. Benchmark core Treasuries are stronger, with the US 10-year yield down 6 basis points at 3.35 per cent. US-based Nymex crude is up, also well off its lows. Having dropped to $98.47 a barrel, it is now up 0.4 per cent to $101.52 on reports that Saudi Arabian military vehicles are moving to support the authorities in Bahrain. Brent crude is still down slightly, by 0.2 per cent, at $113.64.

Libyan fighting pushes oil higher, hurts stocks

Riskier assets were struggling after reports that a pipeline had been hit in Libya pushed oil prices higher, reports the FT’s global market overview. The S&P 500 index rose 0.1 per cent, while gold and Treasury bonds recovered early losses, reflecting residual wariness. Industrial metals were seeing sharp falls. Brent was up 2.5 per cent to $115.87 a barrel, though the US-based Nymex product was down 0.6 per cent to $104.38, helping to damp the impact on stock prices. Meanwhile, an auction of Portuguese two-year notes did not go very well, with demand lower and yields jumping to almost 6 per cent. Lisbon’s 10-year notes are yielding a record 7.68 per cent, while contagion has taken the yield on Italian 10-years to 5 per cent for the first time since November 2008. At the same time, the US Treasury market was suggesting that it did not believe the threat from oil prices had ended. Strong demand at an auction of 10-year notes – the highest bid-to-cover ratio since October – was followed by a wave of buying as short-sellers covered their positions, pushing yields down by 8 basis points, to 3.46 per cent.

Surging oil price casts pall while US tech stumbles

A surging oil price again threw a suffocating pall over market sentiment – crushing a mid-session rally as US technology stocks flopped on fears over global growth, reports the FT’s global market overview. The FTSE All-World equity index was down 0.8 per cent, while a search for “safety” took gold to a new record. The S&P 500 in New York was down 1 per cent, and the tech-rich Nasdaq Composite was off 1.8 per cent after an initial rally on Wall Street. In oil, the US-based Nymex crude contract was up 1.1 per cent to $105.57 a barrel, having earlier touched $106.94, the highest point since September 2008. The more globally representative Brent product was down 0.6 per cent to $115.29. The dollar was strengthening thanks to the decline of Brent prices, even as US stocks continue to tumble on US economic concerns. The dollar index was up 0.1 per cent at 76.48, having earlier hit a fresh four-month low of 76.12. Not even news of a downgrade of Greece’s credit rating by Moody’s could overly damage the euro as traders priced in expectations of an interest rate rise from the European Central Bank next month. The single currency was down just 0.1 per cent versus the greenback to $1.3976.

Algo trading and the Nymex

On Thursday, Reuters reported a very interesting new statistic.

The proportion of trade driven by computers on the New York Mercantile Exchange (owned by the CME Group). Read more

Libya shutdowns send oil soaring

Oil prices surged by more than $6 a barrel as violence in Libya knocked out at least half the country’s production, according to industry executives, reports the FT. Brent oil futures, the global pricing benchmark, jumped 5 per cent to more than $111 a barrel – a 2½-year peak, while Nymex West Texas Intermediate, the US benchmark, hit $100 a barrel for the first time since October 2008. “It is increasingly looking as if this is the real deal in terms of a supply shock,” said JBC Energy, a Vienna-based consultancy.

Brent’s got its problems too

We’ve documented the problems associated with the Nymex WTI crude contract regarding the onset of contango and Cushing syndrome in the US .

But as the CME Group — owner of the Nymex — has pointed out to us (in defence), it’s not like the world’s other global benchmark traded on the rival ICE exchange, Brent crude, doesn’t suffer from its own unique issues too. Read more

Vitol fined $6m over tardy disclosure to Nymex

Vitol, the largest oil trader, has been fined $6m by the US federal commodities regulators for “wilfully” failing to disclose in 2007 information on the relationship of two subsidiaries to the New York Mercantile Exchange, the FT reports. The fine comes amid heightened regulatory scrutiny of the oil market in the US. Earlier this year, the Commodities Futures Trading Commission fined Moore Capital, the hedge fund, and Morgan Stanley with separate penalties totalling $39m for alleged breaches of rules in the precious metals and oil markets. The CFTC said on Tuesday that it had settled a case involving Vitol Inc and Vitol Capital Management Ltd, both based in Houston, Texas. The regulator said Nymex “misperceived” the relationship between the two companies and the companies did not correct the situation until much later.

Chart du jour, commodity speculator edition

The ever watchful Sean Corrigan at Diapason Commodities drew our attention on Monday to the state of outright net speculative length in crude products on the Nymex.

Here’s the chart: Read more

CFTC targets funds in position-limit clampdown

The oil markets have been waiting for it since the summer of 2009; some players have even acted in anticipation already.

But it wasn’t until Thursday that the commodity world got details of what the CFTC really had in mind in terms of increased regulation of energy markets, and position limits. Read more

The bearish bit in the EIA stock data

Nymex WTI futures — which had fallen below $70 per barrel earlier in the week — staged a solid comeback on Wednesday after EIA figures posted greater-than-expected crude draws for the week.

Nevertheless prices were trending lower again on Thursday: Read more

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. Read more

Doth a global natgas glut come (already)?

FT Alphaville has written a lot about Nymex Henry Hub natgas futures prices and the supply glut potentially being formed in the US market.

We’ve not, however, touched upon the UK market quite as much. On Wednesday, though, the following chart did catch our eye: Read more

The CME’s sour

Just two days after Saudi Aramco decided to change the way it prices its oil – by abandoning the Platts WTI benchmark in favour of Argus Petroleum’s Sour Crude Index – the CME, owner of the Nymex exchange, responded rather decisively.

According to a press release on Friday, the CME will be launching its own Argus Sour Crude Index swap futures to fill any potential hedging hole left in the market (our emphasis): Read more

Saudis drop WTI oil contract

Saudi Arabia on Wednesday decided to drop the widely used West Texas Intermediate oil contract as the benchmark for pricing its oil, dealing a serious blow to the New York Mercantile Exchange. The move by the world’s biggest oil exporter could encourage other producers to abandon the benchmark and threaten the dominance of the most heavily-traded oil futures contract. Riyadh’s decision follows the divergence of the WTI benchmark from the global oil market this year.

Crude options

FT Alphaville heard a bit of talk on Monday about unusual call-option activity in the market for WTI crude.

The figures do suggest that there’s an incrementally larger open position in December options than any other near month. For example, the largest open interest position in November — for contracts which expire on October 15 — stands at 20,000, compared with 67,019 in December. Read more

A natgas storm in a tea-cup

A yet ‘undisclosed’ hedge fund has taken out call options at triple — yes triple — the price of today’s spot market price for natgas come winter.

Here’s the mysterious trade in question:
Natgas calls on Nymex Read more

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, the influence of electronic trading on commodity prices. After all, it has only been a few years since ICE and Globex screens revolutionised the way commodities are traded. Coincidentally, it has been in that time that the so-called price “anomalies” have begun to manifest themselves. Read more

WTI crude futures settle above $70 per barrel

Nymex WTI crude futures settled just above $70 per barrel on Tuesday for the first time since November 2008.

WTI nymex crude via Nymex.com Read more

Platts versus the rest of the energy trading world

Platts, a key assessor of physical energy prices, appears to be treading on some thin industry ice.

Energy traders are reportedly up in arms over the group’s planned changes to its pricing methodology which would see it move the timing of some of its US  over-the-counter assessments to 3.15 pm from 2.30pm US central time.  Platts’ reasoning for the move is as follows: Read more

Anything but therm in the US

Natural gas prices in the United States are falling, and falling much more than usual. The benchmark Henry Hub contract traded on Nymex closed at six-year lows of $3.840 per mmBtu on Tuesday, even despite below-average temperatures which are usually supportive to prices.

Higher than expected supplies of natural gas in storage at the start of the year, meanwhile, are not being drawn down as quickly as usual. According to JBC Energy this has much to do with a marked reduction in industrial consumption and insufficient production cutbacks to compensate for the demand shortfall. As they explain: Read more

Hello Americas Sour

There have been well documented problems in the Nymex WTI contract of late, the chief concern being the contract’s viability as a global benchmark following sharp fluctuations in its price versus other oil grades. This is  mostly due to capacity issues at WTI’s delivery point at Cushing, Oklahoma, as well as distortions created by the presence of large passive index funds and ETFs in the contract.

All of which now leads energy market price-finding agency Platts to declare this semi-defiant move against the Nymex on Tuesday (our emphasis): Read more

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… Read more

Rollover, rollover WTI

Just in case there was any confusion, WTI may be at $40.72 per barrel and Brent at $46.24 per barrel but it doesn’t mean there’s major pricing discrepancy.

Brent’s front-month contract has already rolled into the February, while WTI rolls tonight on ICE and tomorrow on Nymex. Read more

Nymex takeover wins approval

The CME Group enhanced its position as the world’s largest financial exchange on Monday by winning member approval for its $7.6bn takeover of Nymex, the New York energy exchange, creating a company that will dominate the US derivatives sector with control of 98% of listed futures. The deal will cement Chicago’s fast-emerging role within the global exchange world. The CME Group was formed last year from the Chicago Mercantile Exchange’s $11bn purchase of the Chicago Board of Trade. Its takeover of Nymex – the combined company’s first purchase of an entire exchange – lays down a challenge to the CME’s New York-based rivals such as Nasdaq OMX and NYSE Euronext.