Hello Petter and Value,
I saw the PEIX massive run up today and regretted that I had not bought back min yet. Like Value, I hesitate because ethanol process and margins are still weak and oil low. I differ a bit from Value's read on oil. I am in the "we have bottomed" crowd, quite solidly so. The contango is what is filling up storage, as buyers buy and wait to sell it. If we were headed for an oil crash in wti, the futures would start to reflect that.
In addition, Cushing has room , as do the pipelines etc. so the dire we are running out of storage stuff is, in my opinion, wrong, and some of it deliberately intended to sway the market.
The trend long term is up, as demand increases annually, and supply gets squeezed due to cutbacks in capex , natural production declines . Even with tight oil productivity gains, we are talking a small amount of bpd global demands.
BaCK TO ethanol, rex, and peix. I am not back in yet, but of course wish I had bought peix in the 9's a few days ago. Now I am watching for a bit of the foam to clear off and may assess peix if it falls back some..Q1 will n ot be the same as q4 14 of course, as prices were weaker q1 overall. However, forward looking, I think positioning for q2 and 3 will be profitable as |I expect ethanol prices to follow gas prices up, and wti to stabalize around $60. All fwiw.
GL
Catkin
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