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API stats from investing.com
Crude +9.94 vs est +3.15
Gasoline + .7 vs est -1.15
Distillates +1.5 vs est -1.15
Crude dropped slightly from 53.15 to 53 in the half hour between reporting and market close. In the past such numbers would have driven wti down a lot more.
There is a lot of money long crude right now. Big hedge funds are in deep. The narrative from OPEC and iea is "compliance is good and the market will rebalance by mid year. The big builds seen in these last two reports is due to unloading of floating storage and the tail end of the pre restriction production frenzy" OPEC has stated they want $60 oil - which means wti with a 57 handle. Big hedge funds are in step and apparently not even close to closing positions. Big money don't care. Oil is going up and they are going to do their damndest to make that happen.
I have been shorting via dwt whenever wti hits 54 or over. It's working ok but I haven't done better than 7% a week since Christmas.
API stats from investing.com
Crude +9.94 vs est +3.15
Gasoline + .7 vs est -1.15
Distillates +1.5 vs est -1.15
Crude dropped slightly from 53.15 to 53 in the half hour between reporting and market close. In the past such numbers would have driven wti down a lot more.
There is a lot of money long crude right now. Big hedge funds are in deep. The narrative from OPEC and iea is "compliance is good and the market will rebalance by mid year. The big builds seen in these last two reports is due to unloading of floating storage and the tail end of the pre restriction production frenzy" OPEC has stated they want $60 oil - which means wti with a 57 handle. Big hedge funds are in step and apparently not even close to closing positions. Big money don't care. Oil is going up and they are going to do their damndest to make that happen.
I have been shorting via dwt whenever wti hits 54 or over. It's working ok but I haven't done better than 7% a week since Christmas.
I looked hard at dgaz 3.9 and i passed it up.
I looked hard at ugaz 20.25 and i passed it up.
I think dgaz at 3.4 offers the same opportunity.
Knocked out my stop at 49.45
Often daily charts repeat the day or days before. I have found this to be true especially in gold. Today's DWTI chart looks like yesterday's. If it holds then there should be a rise starting about 2PM as long oil traders sell positions to protect capital over the weekend. This morning I went long oil PM via U, making over 5%. This afternoon I entered D at 49.5 with a tight stop in anticipation of the chart following yesterday's pattern.
What ticker will you be trading when Credit Swisse shuts down uwti on Dec 9th?
Read everything you can about oil. Read the posts on the board, especially those by kamakiri. This is one commodity where it pays to be knowledgeable about both fundamentals and technical analysis. It always pays to be well prepared.
If you really want to take a ride on the crazy train try natural gas.
If this dip goes deep it may serve as inducement for russia, iran, and iraq to agree to cuts in production. Sort of a preview of what could happen if no deal is struck. Every dollar that oil drops is a dollar off their net profit. If these petrostates look to the future and see the possibility of major price breakdown, then they may be persuaded to cut production by 2% instead.
Oil longs really should send Saudis a nice thank you gift!
http://www.reuters.com/article/us-opec-meeting-saudi-iran-idUSKCN11T0XI
Link to succinct analysis of current NG market:
http://www.economiccalendar.com/2016/09/19/natural-gas-prices-rally-stalls-at-key-resistance/
I posted the text below if you can't reach the link:
By Tracy Morganthall
Natural gas futures ended today’s session with a pullback from key resistance, closing the day off 0.47% with a settlement at $2.934. Following last week’s advance, the majority of which took place at the beginning of the week, overbought conditions became a factor, as indicated by the elevated level of the Stochastic, a price momentum indicator.
The recent consolidation may merely be a reaction to this overextended condition combined with the test of key overhead supply. Resuming the advance over the near term in the presence of the overbought condition would be a sign of internal strength, increasing the potential for a breakout above the July 1st high.
A sustained breakout above the July high would confirm that price action in recent months has represented a consolidation phase in an uptrend dating to the March low. A breakout above the July 1st high would also bring another key resistance level, at $3.105, into play. This represents the May rally peak, as shown on the weekly chart. A sustained move above this peak would be a bullish development for the longer term outlook for natural gas futures.
First support on a move to the downside is at the September 15th low at $2.834, which represents a test of the September 9th intraday high. A decline below this level would bring the rising trendline dating to the 2016 bottom, also shown on the weekly chart, into play. Holding this trendline, near $2.770, would keep the broader bullish bias in natural gas intact.
According the latest Commitment of Traders Report released by the Commodity Futures Trading Commission on September 16th, with data as of the September 13th close, large speculators are net short 77,135 natural gas contracts. Thus, a further advance in natural gas, with a breakout above the July high, could result in the liquidation of short holdings, adding further fuel to the advance in natural gas futures
EIA has started publishing data on DUC inventory.
http://www.eia.gov/petroleum/drilling/#tabs-summary-3
Btw there is some hearty contango on the horizon. That makes timing even more important for making $ during a rally.
I started using fxempire for realtime ng quotes.
Oh boy, i did not see that coming. Build was way more than i projected.
SCHWING!!
Put your stops in place and think twice about holding overnight because IF the storage report comes in with a build (or a big build) more BS will surely spew from OPEC etc. Brent is close to 48 and OPEC don't like that.
I think builds during the next three weeks will be 30-40bcf below 5 year average due to hot ass weather. Shoulder season injections will be at least 20bcf less than the 5 year average. I've been wrong before.
Sold 6.11 starter at 6.19. NG could go higher due to reality that there is less supply and increasing chances that a Hurricane may form and push into the gulf.
If a hurricane poses a plausible threat to the Henry Hub (and to a lesser extent gulf NG production) then NG could take a major fear jump. It could go above $3 before settling back down to 2.80s. I think Dude is right, no more 2.60s. I plan to take advantage of the fear jump if it happens. Currently all cash.
If the next 2 or 3 storage reports come in with healthy builds there's a good chance that wti will dip to 42.5ish which will put D within sniffing distance of 100.
The saudi pr machine, hurricane season, reduced shale production, reduced non opec production and so on are working against that $100 goal. That said, lots of producers are still pumping hard.
I sold the bulk of my D pm at 79.15 Good luck.
Excellent insight. Thanks
starter position 6.11
More than willing to average down as the overblown threat of hurricane combined with under injection pushes NG well into 2.80s
Storage estimates look right on the mark to me. Total should come in +18 to +22bcf. The injection week was pretty warm. The warm weather looks to continue for this injection week and next. After that (Sept) seasonal temps look to take over. I am very interested in the injection numbers for the next three reports as power burns diminish due to seasonally cooling temps. I think they will show that
1. there is less gas being produced
2. ng has taken more power burn from coal than previously thought
I also did some back of the envelope calculations and it appears to me that NG is going to stick the landing and enter November with less gas in storage than last year. I calculate between 3850 and 4000bcf. There should be some major bullish action sometime in October/November. Contango will be significant.
I have been in U and D pretty equally over the past 6 weeks. D is the obvious choice for me now since there is invest 99L silliness irrationally pushing NG up. If tomorrow's report comes in low it could push NG well into the 2.80s making D irresistible.
My wife will tell you that I'm an idiot. She may be right.
When do the saudis or their leg humpers start the bs machine again? I bet it'll be when brent hits 48 (wti low 46s)
Sold my 6.76 for a loss pm mainly to take advantage of dwti price drop before the oil report.
I sure hope so. If those numbers are echoed in the EIA report its gonna be "Bears on Parade". BTW I'm still pissed. I don't wish the shale drillers any ill but the saudis can suck it.
6.76 got filled. Been waiting 2 days.
Its as if they have a written script.
2 weeks ago saudis blow hot air
Last week russians blow hot air
This week iranians blow hot air
We all knew continued rhetoric from opec et al was a potential cloud hanging over D. I got out shortly after the drop started. Still i am in the red with D.
Sucks.
Keep an eye on unorganized tropical disturbance called invest 99L.
https://weather.com/storms/hurricane/news/invest-99l-forecast-atlantic-aug2016
Stopped out friday 8.16. Waiting for more info and price direction before entering either D or U again.
And the dollar, and the eia report, and big money (manipulators)
I did a quick in and out (32 to 33.4). I was pretty sure about the draw being less than expectations. Looking forward I think the upcoming cool weather dominates prices for the next week to 10 days. I'm switching to D, but I don't look for any big price movement. This outlook comes from a guy who just lost over 8% shorting oil. Take it for what it's worth.
Sold my 84s after the report at 77.5. That stung! I am looking to buy at wti +49.
Sept wti 50ma day just got touched. Im down 6% for the week. Waiting...
Hoped to flip this one. Sold for a tiny gain PM.
Aside from the Saudi bs, the IEA announced that the glut is going to be erased in the second half of this year due to production reductions in non opec countries. They also predict a modest decrease in demand due to global economic slow down.
I dont see glut ending this year. The IEA has a history of being biased toward the long view. It is not much more than a cheerleader for oil. However It does influence the oil market.
I bought some at 94.5 late yesterday.
Its a genius move by the saudis. With a few words they added 100s of millions to their bottom line.
Fwiw i got out at 104.5.
Estimates:
WSJ +10bcf
Reuters +2
NGI range from -4 to +5
I think will be +5bcf. I think the NG price will rise on the news. I don't think a miniscule injection is entirely baked into the price. If it does rise to $3, will it be a shorting opportunity, or will it spur a much earlier than expected supply side rally? I'm thinking shorting opportunity.
I have pretty low confidence in my scenarios.