Posts tagged 'WTI'

Welcome to Saudi America

Izabella Kaminska joined FT Alphaville in October 2008. Before that she worked as a producer at CNBC, a natural gas reporter at Platts and an associate editor of BP's internal magazine.

Learn more

| Subscribe to Izzy's posts
| May 09 18:17 | Comment |

WTI crude prices are on the rise, but only at the expense of Brent’s premium. The spread between the two crude grades shrank below $8 this week, its lowest since January 2011.

But what’s really striking is the rise in US crude output, which has risen 57,000 barrels a day to 7.37m — its highest level since February 1992.

If one chart speaks a thousand words in this regard, it’s the following one from the American Enterprise Institute’s Carpe Diem’s blog, charting data from the US Department of Energy:

 Read more

Why the Brent oil market just got some slack

Izabella Kaminska joined FT Alphaville in October 2008. Before that she worked as a producer at CNBC, a natural gas reporter at Platts and an associate editor of BP's internal magazine.

Learn more

| Subscribe to Izzy's posts
| Apr 25 16:33 | Comment |

The number of cargoes that go towards determining the Dated Brent price is rising.

As Reuters reported on Thursday:

At least nine May cargoes have moved up the North Sea Forties crude programme after stronger-than-expected output from Britain’s Buzzard oilfield, the biggest contributor to the Forties stream.

 Read more

The decline of the oil spot market?

Izabella Kaminska joined FT Alphaville in October 2008. Before that she worked as a producer at CNBC, a natural gas reporter at Platts and an associate editor of BP's internal magazine.

Learn more

| Subscribe to Izzy's posts
| Apr 24 11:48 | Comment |

According to the EIA, the definition of “spot market” is:

The price for a one-time open market transaction for immediate delivery of a specific quantity of product at a specific location where the commodity is purchased “on the spot” at current market rates. Read more

More on the spot and forward price commodity disconnect

Izabella Kaminska joined FT Alphaville in October 2008. Before that she worked as a producer at CNBC, a natural gas reporter at Platts and an associate editor of BP's internal magazine.

Learn more

| Subscribe to Izzy's posts
| Mar 05 16:55 | Comment |

An excellent observation from John Kemp over at Reuters on Tuesday regarding the spot/forward disconnect we’ve been talking about:

The increasingly close linkage between hedge funds and spot prices since 2010 has also coincided with a sharp reduction in the correlation between front-month and far-forward prices. Correlation between spot month and forward prices, generally above 90 percent until 2010, is now often less than 50 percent (Charts 5-6). Read more

Unstable commodities

Izabella Kaminska joined FT Alphaville in October 2008. Before that she worked as a producer at CNBC, a natural gas reporter at Platts and an associate editor of BP's internal magazine.

Learn more

| Subscribe to Izzy's posts
| Feb 21 09:07 | Comment |

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

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

A Rosneft hedge distortion?

Izabella Kaminska joined FT Alphaville in October 2008. Before that she worked as a producer at CNBC, a natural gas reporter at Platts and an associate editor of BP's internal magazine.

Learn more

| Subscribe to Izzy's posts
| Feb 15 11:16 | Comment |

This is a follow up to Thursday’s post about Rosneft’s 500 million barrel collateralised financing (to raise money for its purchase of BNP-TNK) and how the market managed to absorb it almost without any price impact.

Most of the previous post was based on the observations of Philip. K. Verleger, who believed the latter point represented a triumph for the futures markets, which had reached a whole new level of maturity.

And yet, as we have been reporting, it’s always more important to look to the curve. Spot price, or “flat price” as traders like to call it, is almost irrelevant. What’s happening in so-called time-spreads is usually much more critical. (And yes, nobody usually takes unhedged positions on flat price.) Read more

Is Saudi Arabia starting to panic?

Izabella Kaminska joined FT Alphaville in October 2008. Before that she worked as a producer at CNBC, a natural gas reporter at Platts and an associate editor of BP's internal magazine.

Learn more

| Subscribe to Izzy's posts
| Jan 11 10:40 | Comment |

Some excellent market commentary from Olivier Jakob at Petromatrix on Friday morning regarding the current state of oil market (dis)equilibrium and the potentially precarious position of Saudi Arabia. Read more

‘The biggest overproduction for any quarter since 1998′

Izabella Kaminska joined FT Alphaville in October 2008. Before that she worked as a producer at CNBC, a natural gas reporter at Platts and an associate editor of BP's internal magazine.

Learn more

| Subscribe to Izzy's posts
| Aug 09 2012 13:30 | Comment |

Did anyone notice how the Brent slump seemed to come to a dramatic halt around June?

 Read more

About Friday’s WTI price surge…

Izabella Kaminska joined FT Alphaville in October 2008. Before that she worked as a producer at CNBC, a natural gas reporter at Platts and an associate editor of BP's internal magazine.

Learn more

| Subscribe to Izzy's posts
| Jul 02 2012 11:26 | Comment |

Late last Friday afternoon, WTI crude futures experienced one of their sharpest price increases since the Libya crisis of last year:

 Read more

Hello Brent contango

Izabella Kaminska joined FT Alphaville in October 2008. Before that she worked as a producer at CNBC, a natural gas reporter at Platts and an associate editor of BP's internal magazine.

Learn more

| Subscribe to Izzy's posts
| Jun 27 2012 10:02 | Comment |

We appreciate that this will not be news for anyone who’s been watching oil markets closely.

However, we still think it’s a valuable recap. Read more

The “other reportables” oil mystery

Izabella Kaminska joined FT Alphaville in October 2008. Before that she worked as a producer at CNBC, a natural gas reporter at Platts and an associate editor of BP's internal magazine.

Learn more

| Subscribe to Izzy's posts
| May 14 2012 10:59 | Comment |

From John Kemp at Reuters on Monday (our emphasis):

Hedge funds and other money managers reduced their long position in U.S. crude by the equivalent of nearly 54 million barrels of oil, the largest one-week decline since at least June 2006, according to data released by the U.S. Commodity Futures Trading Commission (CFTC) on Friday. The long liquidation was three times greater than in the “flash crash”, almost exactly a year ago on May 5, 2011, when speculative longs were cut by a little under 19 million barrels.—– Read more

Brent reigns supreme

Izabella Kaminska joined FT Alphaville in October 2008. Before that she worked as a producer at CNBC, a natural gas reporter at Platts and an associate editor of BP's internal magazine.

Learn more

| Subscribe to Izzy's posts
| May 10 2012 11:05 | Comment |

Back in early 2011, a very intriguing thing happened in the oil markets.

As if by magic — (well, over the period of about a couple of months) — the market collectively and spontaneously moved from using WTI as its primary benchmark for pricing product spreads over to the Brent contract. The era of the “Brent crack” was born. Read more

Here’s where all the oil hedgers have gone…

Kate is FT AV’s Asia Correspondent. She joined FT Alphaville in mid-2011 after carrying out various roles in the FT’s London office since 2005: interactive editor, companies reporter, and founding editor of the FT’s Energy Source blog.

Learn more

| Subscribe to Kate's posts
| May 08 2012 11:52 | Comment |

Last week we wrote about John Kemp’s column pointing out that CFTC data suggests hedgers — those who are exposed to physical prices through their business operations — fuel resellers and others hedge against their operational exposure to oil prices — collectively had the smallest net short position in six years in late April.

We advanced a few possible explanations of our own, including the idea they’d mainly popped over to the Brent market. Read more

Dark inventory, a volatility shock absorber

Izabella Kaminska joined FT Alphaville in October 2008. Before that she worked as a producer at CNBC, a natural gas reporter at Platts and an associate editor of BP's internal magazine.

Learn more

| Subscribe to Izzy's posts
| May 01 2012 16:17 | Comment |

From oil to copper, something strange is going on with commodity inventories.

Official stocks are rising across numerous commodities, but analysts and traders swear fundamentals remain tight, while prices stay supported: Read more

The Saudi oil sales enigma

Izabella Kaminska joined FT Alphaville in October 2008. Before that she worked as a producer at CNBC, a natural gas reporter at Platts and an associate editor of BP's internal magazine.

Learn more

| Subscribe to Izzy's posts
| Mar 19 2012 10:01 | Comment |

Something of a strange one this. Every analyst and his dog has for the longest while been preaching that demand for crude post-crisis has really been all about emerging market demand… that the US, by and large, has become increasingly irrelevant when it comes to global supply and demand.

Yet, from Reuters last week, we had this: Read more

Managed money goes LONG oil

Izabella Kaminska joined FT Alphaville in October 2008. Before that she worked as a producer at CNBC, a natural gas reporter at Platts and an associate editor of BP's internal magazine.

Learn more

| Subscribe to Izzy's posts
| Mar 05 2012 11:05 | Comment |

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

 Read more

Euro crisis, Brent oil edition

Izabella Kaminska joined FT Alphaville in October 2008. Before that she worked as a producer at CNBC, a natural gas reporter at Platts and an associate editor of BP's internal magazine.

Learn more

| Subscribe to Izzy's posts
| Jan 09 2012 12:12 | Comment |

Courtesy of Olivier Jakob at Petromatrix, FT Alphaville presents the price of front-month Brent oil futures expressed in euro terms:

 Read more

The curious case of ‘abnormal’ backwardation

Izabella Kaminska joined FT Alphaville in October 2008. Before that she worked as a producer at CNBC, a natural gas reporter at Platts and an associate editor of BP's internal magazine.

Learn more

| Subscribe to Izzy's posts
| Dec 16 2011 16:18 | Comment |

John Kemp at Thomson Reuters is a big fan of commodity curves — backwardation, contango and all the principles that come with it.

As he often notes, one of the key theories affecting the area is the idea of a convenience yield, initially popularised by John Maynard Keynes.  Read more

Bye, bye WTI-Brent spread disconnect…

Izabella Kaminska joined FT Alphaville in October 2008. Before that she worked as a producer at CNBC, a natural gas reporter at Platts and an associate editor of BP's internal magazine.

Learn more

| Subscribe to Izzy's posts
| Nov 16 2011 15:14 | Comment |

Whoa…. look at that move in the WTI-Brent spread. That’s at least $4 worth of tightening in less than 10 minutes:

 Read more

Fundamentally speaking…

Izabella Kaminska joined FT Alphaville in October 2008. Before that she worked as a producer at CNBC, a natural gas reporter at Platts and an associate editor of BP's internal magazine.

Learn more

| Subscribe to Izzy's posts
| Nov 09 2011 11:28 | Comment |

From Olivier Jakob at Petromatrix on Wednesday:

While crude oil futures continue to be supported by the Iranium premium, the products are not following and the light-end cracks are suffering further. The Naphtha and RBOB cracks to Brent are going as we expected deeper into negative territory and the pressure is now also coming to the European Distillates physical premiums. This is something to follow closely given that the refining margins are currently supported only by the Distillate and Fuel Oil crack. ICE Gasoil expires tomorrow and the backwardation is going through the roof but with a very slow start to winter we have to monitor the weakening trend in the physical premiums. NYMEX Heating Oil is starting to enter contango territory. Read more

“Something structural has changed in current fundamentals”

Izabella Kaminska joined FT Alphaville in October 2008. Before that she worked as a producer at CNBC, a natural gas reporter at Platts and an associate editor of BP's internal magazine.

Learn more

| Subscribe to Izzy's posts
| Oct 28 2011 15:56 | Comment |

John Kemp at Reuters has penned a cracking column on the current peculiarities afflicting the crude markets.

As Kemp notes, ask anyone in the market — specifically the physical market — and they will tell you the market is tight. Not just tight. Really tight. (And most likely that the recent backwardation reflects this tightness.) Read more

Oh, the Iron-y

Izabella Kaminska joined FT Alphaville in October 2008. Before that she worked as a producer at CNBC, a natural gas reporter at Platts and an associate editor of BP's internal magazine.

Learn more

| Subscribe to Izzy's posts
| Oct 28 2011 13:20 | Comment |

Over in the spot iron ore market… there’s a small case of crisis going on.

As Reuters reported on Thursday, prices have been falling consecutively on “slow Chinese demand” and hefty spot supplies. It’s so bad, Reuters says miners are flooding cargoes into the market just to get the best prices while they can. For now, the price of spot iron ore is still more than double miners’ production costs of around $50 a tonne, so the incentive is quite clear. Read more

I thought I saw a backwardation

Izabella Kaminska joined FT Alphaville in October 2008. Before that she worked as a producer at CNBC, a natural gas reporter at Platts and an associate editor of BP's internal magazine.

Learn more

| Subscribe to Izzy's posts
| Oct 27 2011 12:50 | Comment |

It’s only been four days, yet the backwardation in WTI — which caught everyone by surprise on Monday — has already started to ease.

Of course, if it turns out to be this short-lived, the theory that the flip may have been caused by a short squeeze rather than fundamental tightness, becomes easier to imagine. Read more

WTI squeeze theory gains ground

Izabella Kaminska joined FT Alphaville in October 2008. Before that she worked as a producer at CNBC, a natural gas reporter at Platts and an associate editor of BP's internal magazine.

Learn more

| Subscribe to Izzy's posts
| Oct 26 2011 10:05 | Comment |

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. Read more

Money managers and commodities, the case against

Izabella Kaminska joined FT Alphaville in October 2008. Before that she worked as a producer at CNBC, a natural gas reporter at Platts and an associate editor of BP's internal magazine.

Learn more

| Subscribe to Izzy's posts
| Oct 25 2011 18:21 | Comment |

Here’s an interesting chart from the EDHEC-Risk Institute’s latest report on long-short commodity investing:

 Read more

WTI is no longer a burden to passive investors

Izabella Kaminska joined FT Alphaville in October 2008. Before that she worked as a producer at CNBC, a natural gas reporter at Platts and an associate editor of BP's internal magazine.

Learn more

| Subscribe to Izzy's posts
| Oct 25 2011 10:02 | Comment |

It was quite a day on Monday for the WTI US oil benchmark. The structure of the futures curve finally flipped into a subtle backwardation, seeing the contract join Brent in a formation which sees front month futures trade more expensive to those further out.

The last time WTI was seen displaying a backwardated structure was in October 2008. Read more

The WTI-Brent anomaly

Izabella Kaminska joined FT Alphaville in October 2008. Before that she worked as a producer at CNBC, a natural gas reporter at Platts and an associate editor of BP's internal magazine.

Learn more

| Subscribe to Izzy's posts
| Oct 20 2011 13:43 | Comment |

… continued.

How do you actually profit from a contango trade? Read more

Goldman on who’s really wagging the oil market

Izabella Kaminska joined FT Alphaville in October 2008. Before that she worked as a producer at CNBC, a natural gas reporter at Platts and an associate editor of BP's internal magazine.

Learn more

| Subscribe to Izzy's posts
| Oct 04 2011 09:36 | Comment |

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. Read more

Oil traders buy protection against price collapse

Izabella Kaminska joined FT Alphaville in October 2008. Before that she worked as a producer at CNBC, a natural gas reporter at Platts and an associate editor of BP's internal magazine.

Learn more

| Subscribe to Izzy's posts
| Sep 08 2011 10:19 | Comment |

Oil traders are buying protection against a 2008-style price collapse with options that gain value if US crude plummets by year end, the FT reports. Exchange data reveal a surge of interest in options that convey the right to sell oil at $50 a barrel by December, almost $40 below current prices. Open interest has risen by 60 per cent in the past month, making it the second most widely owned December crude put on the New York Mercantile Exchange. Buyers include money managers such as hedge funds which, despite an overall bullish outlook, want to avert catastrophe if the market suffers a repeat of 2008, when the financial crisis drove West Texas Intermediate down to $32 a barrel in the year’s second half. Fears have grown more acute since August, as evidence of a cooling economy, along with the US debt ceiling impasse, has rattled confidence. Global oil demand is still expected to increase to a record 89.5m barrels a day this year, though the International Energy Agency last month shaved 100,000 b/d from its forecast because of high prices and slowdown concerns. Wall Street forecasters, most of them blindsided in 2008, see US crude averaging $97 a barrel in the fourth quarter, according to a Bloomberg survey of 32 analysts. Read more

The Fed’s convenient WTI ‘Cushing’ factor

Izabella Kaminska joined FT Alphaville in October 2008. Before that she worked as a producer at CNBC, a natural gas reporter at Platts and an associate editor of BP's internal magazine.

Learn more

| Subscribe to Izzy's posts
| Aug 30 2011 14:06 | Comment |

Since the Treasury yield curve is becoming less responsive to Fed intervention, we’ve outlined the case for why it might make sense for the Fed to start targeting the energy curve instead.

Obviously the Fed mandate remains an issue. Read more

BackOlder entries