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Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Here is one of the charts I use:
http://ca.investing.com/commodities/crude-oil
WTI 46.70 -0.71 -1.50%
WTI 47.24 -0.17 -0.36%
Independent Refiners Face Existential Threat
By Michael McDonald - Aug 21, 2016, 2:58 PM CDT
Carl Icahn is sounding the alarm about a rising threat that he believes could bankrupt independent refiners en masse. Icahn is concerned about the surge in government ethanol blending credits and the impact that the increase in supply will have on companies like CVR Energy. Icahn holds an 82% stake in that firm.
EPA mandates to blend biofuels like ethanol and biodiesel have risen sharply helping to put pressure on firms like Valero and PBF Energy. Gas stations can generate RIN credits by selling renewable fuel blended into gasoline to consumers. Refiners without retail gas stations will likely have to pay $1.8B in 2016 for Renewable Identification Numbers (RINs) since they can’t generate the credits as competitors that do own gas stations can. The price of RINs has varied over time from anywhere between as little as $0.05 a gallon to as much as around $1.50 per gallon or more.
"The RIN market will cause a number of refinery bankruptcies…The domino effect of this will be that ‘big’ oil will sop up the bankrupt refineries, causing an oligopoly resulting in skyrocketing gasoline prices." Icahn wrote in an Aug. 9 letter to Environmental Protection Agency administrators Gina McCarthy and Janet McCabe according to Bloomberg. Pointing out that independent refiners appear to be being penalized for something they cannot control, Icahn is holding out hope that Donald Trump will become President of the United States and stop the EPA regulations.
The RIN situation is being exacerbated by independent trading of the credits. As speculators have entered the market, demand for the credits has risen which in turn has pushed up prices. RINs can be shorted or bought, and Icahn alleges that independent refiners are being squeezed by retail gas station companies selling the RINs they generate to investment banks who in turn can hold them until prices rise and independent refiners are forced to buy the credit to meet legal mandates.
It’s unclear if there really is collusion in the RIN market as Icahn alleges, but there is little doubt that trading in RINs by third parties does occur. Refiners have been complaining about the surge of speculation from parties like Vitol for years. Vitol, the world’s largest trader of oil, has reportedly done very well with RIN trading over time.
Icahn is a very sophisticated investor of course, and there is little doubt that he is using his personal clout and name to bring attention to an issue on the side that will benefit firms he owns or holds large stakes in. Nonetheless, the RIN market is clearly facing some stresses in large part because consumers are simply not using as much in the way of renewable fuels as expected.
The result of this increasing RIN cost is to make retail gas station ownership more valuable. That in turn should boost the valuation in private transactions for small chains of gas stations as well as publicly owned chains like Casey’s and Murphy USA. Marathon Petroleum which owns the Hess gas station chain also stands to benefit.
By Michael McDonald for Oilprice.com
http://oilprice.com/Energy/Crude-Oil/Independent-Refiners-Face-Existential-Threat.html
WTI 47.70 -1.41 -2.87%
Please note: the Crude Oil contract rolled over on Aug 21, 2016 to the Oct 16 contract
Oil Climbs, but Firms Are Still Feeling Pain - WSJ
A rally that pushed international crude-oil prices above $50 a barrel Thursday is a welcome sign for many energy companies but not enough to kick-start an industry in the midst of a two-year slump, executives said. “We’re in a little bit of an upswing at the moment and everybody’s got a smile on their face because we might be at $50 a barrel,” said Tony Durrant, chief executive of Premier Oil PLC, a British oil company with operations from the North Sea to the Falkland Islands.
But, Mr. Durrant said in an interview Thursday, “every day of every week I’m talking to our joint-venture partners around the world and I hear people still canceling projects.”
Oil prices remain far below the $100-a-barrel area that energy companies had become accustomed to during a nearly decadelong run that ended in 2014, when a global oversupply of crude sent prices skittering down to as low as $27 a barrel in January. On Thursday, Brent crude, the international benchmark, breached $50 a barrel for the first time in six weeks and, along with the U.S. benchmark, entered bull-market territory.
The rebound isn’t enough yet to solve the problems of even the biggest and most resilient oil companies.
WTI 48.46 +0.24 +0.50%
WTI 48.08 -0.14 -0.29%
Oil Prices Continue To Rise On Hollow Saudi Comments
By Irina Slav - Aug 18, 2016, 5:17 PM CDT
Last week Saudi Arabia’s Oil Minister said that the large number of short positions on crude have caused prices to fall, even though the market is already rebalancing itself. This statement immediately led to frantic covering, which pushed prices higher.
This is just the latest confirmation that Saudi Arabia has taken center stage when it comes to oil. Nobody cares anymore about fundamentals, everyone listens to what Riyadh says. If Riyadh is bullish on oil, then oil prices rise, despite any production data that might contradict their words. If Riyadh decides for some reason to be bearish, the market follows.
The extent of this dependency of traders on every word that comes out of Khalid al-Falih’s mouth (and other Saudi officials) becomes all the more evident in light of the latest production forecasts for Saudi Arabia. August production is expected to hit a new high of 10.8-10.9 million bpd, up from 10.67 million bpd in July. Why? Likely so Riyadh has more leverage at the upcoming unofficial OPEC meeting in Algeria. Not that it needs it, now that it is the undisputable tone-setter of the organization.
And here’s another example of how far things have gone: virtually nobody expects the meeting to lead to any sort of agreement to freeze production. In the slim chance it does lead to such an agreement, the Saudi’s record output would indeed provide it with additional leverage: it will be able to continue pumping at the same level. However, the chance is so slim, it’s next to non-existent. Even so, the mere talk about the possibility of a production freeze got traders going long on crude—despite the clear lack of any sign of willingness on the part of Saudi Arabia to cut its output.
Some analysts believe that Saudi officials are simply reflecting the rebalancing of the market. They argue that the market is indeed rebalancing and that next year oil fundamentals will swing into a deficit. Others, such as Goldman Sachs and Morgan Stanley, are not as bullish.
This last oil crisis has made it abundantly clear – supported with scientific research – that you can never be sure where the market will be in a year, let alone longer periods, whatever you do. There are too many variables to be considered. In other words, you can’t trust anyone. Yet, if you’re a trader, you need to have someone to trust, and this someone has turned out to be Saudi Arabia.
Many believe the Saudi tactic of pressuring prices to maintain market share and drive out higher-cost producers is working. And indeed, it is working. There is, however, a question, and this question is: How long will it work?
Unlike Russia and Iran, its greatest foes in the oil arena, Saudi Arabia is not exactly used to economic hardships. It hasn’t experienced serious deficits, if any, in its entire history. Now, it’s going for broke by pumping more and more oil and reducing prices as needed.
This game of output, however, could turn into a game of endurance, if despite all bullish Saudi talk, fundamentals show a different picture. Then someone else will take Saudi Arabia’s place. This won’t really make any big change in oil markets. After all, commodity trading is notoriously vulnerable to forecasts, opinions and rumors, likely as much as it is influenced by actual events and trends affecting supply and demand.
By Irina Slav for Oilprice.com
http://oilprice.com/Energy/Energy-General/Oil-Prices-Continue-To-Rise-On-Hollow-Saudi-Comments.html
Why oil prices just stampeded into bull-market territory
By Myra P. Saefong
Published: Aug 18, 2016 3:42 p.m. ET
OPEC output freeze talk, U.S. supply fall, weak dollar fuel rally
Getty
The bull market in oil is fired up again.
Oil prices officially charged into a bull market Thursday as the prospect of an output freeze by major producers, data showing the first weekly fall in U.S. crude supplies in a month, and a decline in the dollar boosted prices.
Crude-oil prices have advanced more than 20% from their Aug. 2 low over the past several sessions, signifying a bull-market run.
September West Texas Intermediate crude CLU6, +0.33% climbed by $1.43, or 3.1%, to settle at $48.22 a barrel on the New York Mercantile Exchange. That is 22% above the recent settlement low of $39.51 on August 2. Prices Thursday logged a sixth-straight session gain.
FactSet
Brent crude also rallied to settle 22% above their low from earlier this month. October Brent LCOV6, +0.00% settled at $50.89 a barrel on the ICE Futures exchange in London, up $1.04, or 2.1%, Thursday.
“This is definitely an impressive move higher,” said Tyler Richey, co-editor of The 7:00’s Report. It appears that “the freeze speculation” is working for the Organization of the Petroleum Exporting Countries again, he said.
Earlier this month, the 14-member group of major oil producers said it would hold an informal meeting on the sidelines of an energy forum in Algeria on Sept. 26 to Sept. 28 to discuss ways to stabilize the oil market.
Saudi Arabia, OPEC’s top producer, and non-OPEC Russia, the world’s largest crude producer, have expressed willingnessness to participate in those talks, which some say could lead to a pact to freeze production levels.
Iran has chimed in, reiterating plans to raise its production back up to pre-sanction levels, raising doubts over a deal to freeze output. An attempt last spring to reach an agreement in Doha, Qatar to freeze output failed after Iran refused to join in, prompting the Saudis to give up on the plan.
But talk from Iran didn’t a lasting damper on oil prices, which trade roughly 8% higher week to date.
Adding to fire to the rally, the U.S. Energy Information Administration on Wednesdayrevealed that domestic crude inventories fell for the first time in four weeks and the dollar was set to end the week lower against its currency rivals, with the ICE U.S. Dollar Index DXY, +0.20% down about 1.6% week to date.
Darin Newsom, DTN senior analyst, pointed out Thursday that this week’s oil rally has established a new four-week high—a “secondary bullish technical signal meaning that the market could continue to rally despite minor, short-term, indicators being overbought.”
Still, traders need to keep in mind that the current front-month September futures contracts expire at the Nymex settlement on Monday. October WTI crude CLV6, +0.22% will become the new front and it’s trading higher than the September contract, at $48.89 a barrel Thursday.
Newsom said the September-to-October price spread is at a “contango” of roughly 67 cents a barrel. This could put the October contract at the July high of $49.35 when it takes over as the spot contract, he said.
Richard Hastings, macro strategist at Seaport Global Securities, said the rally in the October WTI contract is “pretty substantial, quickly moving from about $40 per barrel to almost $48.”
“We see some resistance at about $49.60…showing how tough it is to get back to and beyond $50,” he said. But “a couple of hurricanes in the Gulf of Mexico would help.” Atlantic hurricanes can disrupt oil production in the region.
Luckily, at least for the oil-price bulls, the U.S. National Oceanic and Atmospheric Administration recently raised its expectations for the Atlantic hurricane season which ends on Nov. 1.
http://www.marketwatch.com/story/oil-prices-charge-into-a-bull-market-2016-08-18
I just added more D at 70.62.
Lots of $$$$ to be made!
I am still in on both sides, but more on the D side.
Good call!
When it falls it is going to fall hard!
Not only Goldman but others need to bring Saudi Aramco public next year. Oil will have to go up to make that happen.
I fully expect it to be manipulated to much higher prices.
$60 is my goal??????.
Why it might not be wise to watch the oil charts right now
By Nigam Arora
Published: Aug 16, 2016 3:00 a.m. ET
Will oil go to $26 or $60? This is the question of the moment. There are more than a few opinions by gurus on both the bullish and bearish sides. The dilemma that investors and traders face is that most of the gurus have been continuously wrong on oil. Do not blame the gurus. Oil is the most volatile and most difficult commodity to forecast. Of course, you could ask, "Why should we listen to you?" Well, we have a way of looking at oil that may, hopefully, offer a different perspective.
Our algorithms at The Arora Report for oil have input data in seven categories, and I suggest that investors take a look at all of these categories in making investing and trading decisions in oil. Here are the categories.
Technicals as shown on the charts in various time frames
Oil supply
Oil demand
Geopolitics
Oil and product inventories
Sentiment
Market positioning
Here I will discuss only charts and sentiment. Other categories will be the subject of future columns.
The medium-term chart
Let us start with a medium-term chart of WTI crude oil September futures contract that trade on NYMEX CLU6, +0.75%
Here are the key observations from the chart.
After the big decline, the first major rally from the bottom failed at the major resistance zone.
The pullback failed to stop at the first support zone and continued down to the support zone under $40.
Under $40, crude experienced an outside day. An outside day occurs when the low of the day is lower than the prior day and high is higher than the prior day. After a decline, an outside day often marks a reversal as sellers get exhausted. This time was no different and a rally ensued.
Relative Strength (RSI) which was oversold when oil dipped below $40, turned up coinciding with the outside day. As of this writing, the rally has reached the first resistance zone shown on the chart.
If the price is able to go above the first resistance zone, it will mean more strength in the short-term. On the other hand if the rally fails at the first resistance zone, implication will be bearish.
Long-term chart
Let us next look at a long-term chart. I have chosen a chart of oil ETF USO, +0.64%for those investors who trade oil with ETFs and not futures.
The chart shows Fibonacci levels. The first significant Fibonacci level is at 23.6% which corresponds to $15.23 for price on USO. The last rally fell far short of this level. Part of this shortfall is due to tracking error. However, even after taking into account the tracking error, the rally fell short. This is bearish.
The other observation from the chart is that RSI is showing a bullish divergence. However based on my over 30 years of experience in the markets, I can confidently say that in most cases, a bullish divergence on RSI on a long-term chart after a steep decline leads to a bull trap.
Chart of inverse ETF
The most common way to determine sentiment is through surveys. Investors can add another dimension to sentiment analysis by looking at the volume of leveraged ETFs.
I am showing this chart of inverse oil ETF ProShares Ultrashort Bloomberg Oil SCO, -1.64% for three reasons. First, many investors get frustrated because they are not able to short. For such investors, there are inverse ETFs that go up when the underlying price goes down. The Arora Report used SCO in a portfolio where shorting is not allowed.
Second, SCO is a leveraged ETF and often shows a large tracking error. For this reason, the general recommendation is to use leveraged inverse ETFs only for very short-term trades. I would like to point out that when judiciously used in anticipation of a large price move, a tracking error can work in investors' favor. This has been the case in our trade on SCO that we entered at $25.87 and took partial profits on one tranche as high as $218.43.
I would like to bring your attention to the volume on this popular ETF. You will notice from the chart that the volume has dramatically fallen. This indicates that the sentiment has shifted to positive.
I find looking at the volume of other oil ETFs such as iPath S&P GSCI Crude Oil TR ETN OIL, +0.51% ProShares Ultra Bloomberg Crude Oil UCO, +1.61% VelocityShares 3x Inverse Crude Oil ETN DWTI, -1.99% VelocityShares 3x Long Crude Oil ETN UWTI, +1.42% provide important sentiment clues. The shift in sentiment to positive is not necessarily bullish. The reason is that this means aggressive shorts have already exited the market and will no longer provide the fuel for an upward move by buying to cover.
The charts appear to be telling us that oil is neither likely to drop to $26 nor rise to $60 in the near future; but is likely to stay in a wide trading range with a slight bearish bias.
Under such conditions, it is best to give more weight to the other five factors mentioned above and depend less on charts.
Disclosure: Subscribers to The Arora Report may have positions in the securities mentioned in this article and/or may take positions in securities described in this article any time. All recommended positions are reviewed daily at The Arora Report and subscribers may receive additional information in real time not available to the readers of this article.
http://www.marketwatch.com/story/is-it-wise-to-watch-the-charts-right-now-when-it-comes-to-oil-2016-08-15?siteid=yhoof2
WTI 47.05 +0.26 +0.56%
One Of The World’s Top Oil Traders Is An Olympic Hopeful
By Tsvetana Paraskova - Aug 17, 2016, 2:02 PM CDT
Jose Larocca
A millionaire oil trader at Geneva-based Trafigura—the world's third-largest private oil and metals trader—is jumping for a medal in the Rio Olympics, competing for Argentina in an equestrian event, Swiss financial news website finews.ch reports.
Forty-seven-year-old Jose Larocca is board member and head of oil trading at Trafigura, but his ambitions lie beyond oil, gas and gasoline: he vies for a medal at the ongoing Olympics.
Switzerland-born trader Larocca is part of the younger generation of traders who received Trafigura shares in an ownership reshuffle two years ago.
Speaking to finews.ch about the Olympic ambitions of its head of oil trader, Trafigura just said that “he keeps that part of his life separate from his working life”.
In June, Trafigura reported its first-half figures for the period ended March 31, 2016, saying that trading was especially strong in its oil and petroleum products division, with volume traded daily topping 4 million barrels for the first time on record.
Clearly Trafigura has an overachiever on their hands, on multiple fronts.
And in July, Trafigura hit the headlines by taking part in the shipment of Iran’s first oil to China’s small independent refineries, the teapots. Iran’s National Oil Company (NIOC) had sold some 2 million barrels to Trafigura in June, making Trafigura the first among its peers to start selling crude to Chinese teapots.
Last week, Bloomberg reported that the NIOC was in talks to sell more crude to Trafigura bound for the Chinese teapots, including under a possible long-term agreement. Talks are ongoing, and no deal has been finalized, Bloomberg quoted its sources as saying.
In addition, Trafigura is competing to grab a larger chunk of the global bitumen market, which is expected to grow at a compound annual growth rate (CAGR) of four percent until 2020.
Now, Trafigura’s head of oil trading Larocca may miss a couple of multi-million deals these days, but he will certainly have more accomplishments under his belt than the average trader; he will have competed in the Olympics.
By Tsvetana Paraskova for Oilprice.com
http://oilprice.com/Latest-Energy-News/World-News/One-Of-The-Worlds-Top-Oil-Traders-Is-An-Olympic-Hopeful.html
Added more at 75.37 just now.
WTI 45.94 -0.64 -1.37%
WTI 46.13 -0.45 -0.97%
WTI 46.25 -0.33 -0.71%
Oil appears to be dropping. DWTI now at 78.28.
Added more at 77.86.
WTI 45.56 -0.18 -0.39%
WTI 45.46 -0.25 -0.55%
WTI 45.68 +1.19 +2.67%
I just added more at 82.57.
WTI 45.13 +0.64 +1.44%
45.36 +0.87 +1.96%
WTI 44.86 +0.37 +0.83%
DWTI is at 87.62.
I just added more at 87.99.
WTI 41.86 +0.15 +0.36%
20 Months, 90 Bankruptcies In North-American Oil & Gas
P/C Sergio Russo
A report published earlier this month by Haynes and Boone found that ninety gas and oil producers in the United States (US) and Canada have filed for bankruptcy from 3 January, 2015 to 1 August, 2016.
Approximately US$66.5 billion in aggregate debt has been declared in dozens of bankruptcy cases including Chapter 7, Chapter 11 and Chapter 15, based on the analysis from the international corporate law firm.
Texas leads the number of bankruptcy filings with 44 during the time period measured by Haynes and Boone, and also has the largest number of debt declared in courts with around US$29.5 billion.
Forty-two energy companies filed bankruptcy in 2015 and declared approximatelyUS$17.85 billion in defaulted debt. The costliest bankruptcy filing last year occurred in September when Samson Resources filed for Chapter 11 protection with an accumulated debt of roughly US$4.2 billion.
The study noted an acceleration in bankruptcy filings in 2016 with forty-eight filings in the first seven months alone including at least twelve cases with defaulted debts of at least US$1.2 billion. Oklahoma-based SandRidge Energy reported a US$8.2 billion deficit for during a one-week span in May where seven firms declared bankruptcy on debts of at least….
CONTINUE READING
http://www.govtslaves.info/20-months-90-bankruptcies-in-north-american-oil-gas/
Saudis Raise Fees to Offset Less Oil Income - WSJ
August 10, 2016
DUBAI—Saudi Arabia, faced with dwindling oil income, sharply increased government fees such as visa charges as part of a range of measures aimed at raising revenue from sources other than oil.
Under the new rules, foreigners will have to pay $800 for a six-month visa, six times the current cost. The government also announced hefty fines for traffic violations. It also more than tripled the fees it charges to advertise on billboards.
In an era of cheap energy prices, Riyadh is pushing to overhaul its oil-dependent economy by asking its citizens as well as foreigners to do more to help fill state coffers.
The visa-fee increases, which come into force in October, will mostly affect foreigners who travel to the kingdom for work.
—Margherita Stancati
Morgan Stanley: Oil To Fall To $35 In A Few Weeks
By ZeroHedge - Aug 09, 2016, 3:47 PM CDT
Morgan Stanley's Adam Longson has been one of the most bearish sell-side analysts on oil, and overnight he confirmed he isn't going to change his opinion any time soon, and instead warns that while "a profit taking and short covering bounce in oil late in the week has led some to declare that the troubles are behind us" he believes that "very little has been addressed fundamentally to correct these problems. Greater headwinds lay ahead, especially for crude oil. In fact, we would argue that recent price action and developments may have exacerbated the situation." Putting a number to his call: oil will slide to $35 in the next 1-3 months.
The key point in Longson's latest note is a simple, and recurring one: "Fundamental Oil Issues Have Not Been Addressed" and that "Physical market stress due to fundamental headwinds is still ahead."
This is what he says:
A profit taking and short covering bounce in oil late in the week (partly on a US gasoline draw driven by lower imports) has led some to declare that the troubles in oil are behind us. However, while the market began to price in some of the headwinds prematurely via flat price, very little has been addressed fundamentally or through physical market indicators to correct the material problems in oil markets.
Greater headwinds ahead, especially for crude oil. In fact, we could argue that recent price action and developments may have exacerbated the situation.
o The fall in oil prices has only lifted refinery margins, which should support product oversupply: Refinery margins (p.38-39) are not at a level to cause distress or the large run cuts that will be required, despite lower product cracks. The issue is that lower oil, fuel oil and natural gas prices globally reduce operating costs, while a strong USD has lowered general opex and G&A for Europe and Asia on a relative basis.
o A cut in Saudi OSPs reinforces Asian crude oil demand, which should delay necessary run cuts. Asia and the Middle East were the primary incremental contributors to the oversupply in global gasoline and diesel. Expectations had been for Asia to see economic run cuts, but efforts from oil suppliers to support crude demand and refinery margins reduce that probability. Hence, product markets may need to, and are likely, to deteriorate further before corrective actions are taken.
o Returning supply is a boon to refiners. The crude oil oversupply has shifted more refiners to spot purchases where new distressed cargoes can provide opportunities.
o Refiners are reluctant to capitulate. During earnings season, a number of refiners admitted that run cuts may be needed, but few were willing to make economic run cuts themselves. In fact, the global fall maintenance schedule looks surprisingly light at this point. We expect more maintenance or unplanned outages (e.g. Whiting) ahead.
Separately, US crude oil stats are likely to trend bearish over the coming months. US waterborne imports are likely to stay elevated for 1-2 months given sailing times and prior price signals. However, Canadian supply is returning and refinery demand should fall seasonally (we are past peak runs). With the market trading much more closely on weekly DOE developments, a larger build in US crude oil stocks in Aug or Sep could weigh on sentiment, and WTI time spreads at a minimum.
How does this analysis translate into what happens to the future price of oil, and where Morgan Stanley see oil going next?
The bottom of our trading range remains $35. Although our 4Q16 Brent average is $40, which is an important psychological level, we also provide a trading range for our base case around our forecasts. Despite the recent bounce, we see the prospect for lower prices in the next 1-3 months and a deeper contango. However, we see a soft floor around $35/bbl. There is no intrinsic value or physical market response that will prevent prices from breaking that level, but we see a setup for why the mid-30s could be a critical level.
Related: China Could Quadruple Gas Imports By 2030
A rising short position into the mid-30s could make the market more susceptible to OPEC discussion and other headlines. If prices fall to the mid-30s with a large build in short position, it should begin to limit downside risk and provide a soft floor. At such levels, the risk-reward to lower prices is not attractive without a major fundamental change. As a result, investors who have earned profits on their shorts may unwind them or be reluctant to press them in the face of any potential bullish headlines.
The primary catalyst for a short-covering floor would likely be OPEC talk of intervention. Press reports of renewed talks within OPEC are already starting, with Venezuela leading the charge. If prices continue to languish, other producers may be open to the idea, particularly after the market reaction to freeze discussions earlier this year. While some investors may be dismissive of OPEC, the market continues to respond to members’ commentary. Moreover, the probability of some intervention (although still low) rises heading into the Dec 2016 meeting given sustained stress and the full return of Iranian volumes.
Reaching our $30 Brent average bear case would likely require greater fundamental changes and macro stress. The risk to move below $35 would likely need to come from a large fundamental change (such as Libyan supply returning) and/or macro concerns on top of already poor fundamentals – as we witnessed in Jan 2016. These issues have the potential to change investors’ perception of the rebalancing point, or result in macro positioning liquidation. Within these risks, the probability is rising for a return of Libya, which alone could offset most of the increase in crude oil demand (not refined products) for 2016.
Option positioning and upcoming expiry could be important near term events. We see a notable open interest for Sep WTI puts in the $38-42 range expiring next week. Closing these positions could add some upside buying, while the negative gamma could reinforce any larger down moves by creating forced selling from dealers.
Related: This Billionaire Could Change The Resource Industry Forever
As a reminder, Adam was among the first to point out, back on April 26, that oil prices will retrace the pattern observed last year, with a substantial bounce into the summer, and a subsequent, and seasonal, fade heading into the fall and winter.
So far he has been correct.
But if he is also correct about what happens to oil next, there may be a problem, because as JPM pointed out over the weekend, oil sliding below $40 would be not only a breach of a key psychological support level, but also the level below which SWFs would be forced to resume selling equity assets all over again.
By Zerohedge
http://oilprice.com/Energy/Oil-Prices/Morgan-Stanley-Oil-To-Fall-To-35-In-A-Few-Weeks.html
WTI 42.62 -0.40 -0.93%