Time To Short Oil?

Monday, October 12, 2009

Crude oil futures surged above $50 a barrel Wednesday as U.S oil inventories increased by less than expected.

Crude stockpiles rose by 1.7 million barrels in the week ended April 3, according to the U.S. Energy Information Administration, close to the average forecast of a 1.9 million-barrel build given by analysts in a Dow Jones survey.

Light, sweet crude for May delivery traded $1.50, or 3%, higher at $50.65 a barrel on the New York Mercantile Exchange, after trading as high as $51.10 a barrel.

Probably it is a good time to sell short July`s Nymex Crude Oil Futures at these levels (55.88 USD) and benefit from a correction in the oil prices and contango. If crude oil rises less than 10% till June/July you will be in the money. It looks like a nice deal.

Oil Traders Blog is a website for active online oil futures traders. We provide research and relevant oil and energy related news for the oil trader or daytrader.

George Soros: This is a Bear Market Rally in Stocks

George Soros, the billionaire hedge- fund manager who made money last year while most peers suffered losses, said the four-week rally in U.S. stocks isn’t the start of a bull market because the economy is still shrinking.

“It’s a bear-market rally because we have not yet turned the economy around. This isn’t a financial crisis like all the other financial crises that we have experienced in our lifetime.”

Oil Traders Blog is a website for active online oil futures traders. We provide research and relevant oil and energy related news for the oil trader or daytrader.

Soros: The U.S. economy is in for a "Lasting Slowdown"

The U.S. economy is in for a "lasting slowdown" and could face a Japan-style period of relatively low growth coupled with high inflation, billionaire investor George Soros.

"I don't expect the U.S. economy to recover in the third or fourth quarter so I think we are in for a pretty lasting slowdown," Soros said, adding that in 2010 there might be "something" in terms of U.S. growth.

So George Soros is quite pessimistic on the US economic recovery.

Oil Traders Blog is a website for active online oil futures traders. We provide research and relevant oil and energy related news for the oil trader or daytrader.

Daniel Yergin says 40 USD a Barrel













- There is still a very large over capacity;
- Inventories are very high;
- This year world demand will be 83.5 millions barrel a day against 86 millions barrels a day 2 years ago;
- There will be a cap on oil prices
- The sense that the recovery will take longer than antecipated may create a 40 to 60 trading range;

Oil Traders Blog is a website for active online oil futures traders. We provide research and relevant oil and energy related news for the oil trader or daytrader

Jim Cramer on USO

Jim Cramer argued against investing in the United States Oil Fund (USO). According to the digest at TheStreet.com:

"Cramer took aim at the United States Oil ETF in particular, calling the fund simply a travesty.

Cramer said the United States Oil Fund is not what it promises. The fund does not track the price of crude as it claims. Since the fund's [inception], crude oil has fallen 23%, yet the fund is down almost twice that at 54%. Just this year, oil is up 18%, but the United States Oil Fund is down 6%. This fund has nothing to do with oil at all, he said.

Cramer said the problem with the fund is that it doesn't buy oil, and instead buys oil futures. Since oil futures expire, the fund rolls over its contracts every month, incurring costs and expenses it'll never recover. Cramer said while the operations of the fund are legal, and listed in the [prospectus], investors need to steer clear at all costs."

Oil Traders Blog is a website for active online oil futures traders. We provide research and relevant oil and energy related news for the oil trader or daytrader.

The S&P 500 Has Now Been Up For 4 Straight Weeks

The S&P 500 has now been up for 4 straight weeks, registering a gain of 23.28%. Interestingly, the last time we had a 4-week winning streak that saw gains of at least 10% was 10/02-11/02, which was the start of the five year bull market that ran until 10/9/07.

Below we highlight all 4-week winning streaks of 10% or more for the S&P 500 going back to 1927. As shown, this is the 3rd strongest 4-week winning streak on record, and the strongest since April 1933.

Oil Traders Blog is a website for active online oil futures traders. We provide research and relevant oil and energy related news for the oil trader or daytrader.

S&P 500 Volatility


Interesting article I have found on Bespoke,

In late 2008, the market experienced its most volatile 50-day period ever. At one point, the average daily move of the S&P 500 over the prior 50 days was +/-4%! While volatility is still very high, it has nearly been cut in half from its peak in late 2008. As shown below, the average daily change for the S&P 500 over the last 50 days has been +/-2.07%.



Oil Traders Blog is a website for active online oil futures traders. We provide research and relevant oil and energy related news for the oil trader or daytrader.

Crude Oil Falls After U.S. Inventories Climb to a 15-Year High

Crude Oil Falls After U.S. Inventories Climb to a 15-Year High .

Crude-oil inventories climbed 2.84 million barrels to 359.4 million in the week ended March 27, the highest since July 1993, the Energy Department said today. A 3-million-barrel increase was forecast, according to a Bloomberg News survey. Gasoline supplies rose by 2.23 million barrels to 216.8 million.

Word on The Trading Desks

“There are ample supplies of crude” said Mike Zarembski, senior commodity analyst at OptionsXpress Holdings Inc. in Chicago.

Oil Traders Blog is a website for active online oil futures traders. We provide research and relevant oil and energy related news for the oil trader or daytrader.

Oil Down Before Inventories

Crude oil futures fell Wednesday in Asia as traders liquidated long positions on caution ahead of weekly U.S. government oil data expected to indicate that demand and supply fundamentals remain weak.

The federal Energy Information Administration will put out its Weekly Petroleum Status Report at 1430 GMT.

Oil Traders Blog is a website for active online oil futures traders. We provide research and relevant oil and energy related news for the oil trader or daytrader.

Word on the Trading Desks

“Last week’s break above $50 looks as if it was a false dawn for the oil market bulls. Although OPEC production restraint has tightened the market, there’s still a big overhang of stocks." Christopher Bellew, senior broker at Bache Commodities Ltd.

Oil Traders Blog is a website for active online oil futures traders. We provide research and relevant oil and energy related news for the oil trader or daytrader.

Oil is Down For a Second Day

Crude oil declined for a second day as tumbling equity markets indicated that economic activity and demand for fuel may weaken further.

Global demand remains slack and oil is unlikely to reach $60 a barrel this year, Qatar’s Oil Minister Abdullah Bin Hamad Al-Attiyah said. Crude also dropped as the dollar strengthened to its highest against the euro in more than a week, limiting the appeal of commodities used to hedge against inflation.

Oil Traders Blog is a website for active online oil futures traders. We provide research and relevant oil and energy related news for the oil trader or daytrader.

Crude Oil Falls as Stronger Dollar Curbs Appeal of Commodities

Oil futures dropped from the highest close in 4 months as a stronger dollar reduced the appeal of commodities related investments.

Oil futures dropped as much as 3.4% on NYMEX after the US dollar surged almost 2% against the euro currency.

“The stronger dollar is bringing all of the commodities down” The Federal Reserve’s policies have become the major driver of the commodities.” Phil Flynn, trader at Alaron Trading Corp.

Oil Traders Blog is a website for active online oil futures traders. We provide research and relevant oil and energy related news for the oil trader or daytrader.

Oil has Bottomed Out

Investors are laying the groundwork for another bull run on the energy and commodities markets, in spite of signs suggesting the overall economy is still deteriorating.

Analysts and economists are saying with some confidence that oil prices have bottomed out. And Wall Street is taking notice that spot and futures prices for West Texas Intermediate crude have risen by nearly 40 percent since hitting $33 in December.

The best data show U.S. demand for oil is still weak. On Tuesday, the American Petroleum Institute reported a 4.6-million-barrel buildup in U.S. crude stockpiles, pushing prices lower. Demand in China is off by at least 15 percent year-over-year, and other bearish economic indicators will likely keep prices volatile in the short term.

The impact of the down economy has been felt more on the supply side than on demand, as reflected in OPEC's response, but especially in the sharp fall-off of new exploration and production activity in non-OPEC states.

But oil market watchers say the Organization of Petroleum Exporting Countries, or OPEC, has conclusively dropped production faster than demand has fallen.

Oil Traders Blog is a website for active online oil futures traders. We provide research and relevant oil and energy related news for the oil trader or daytrader.

U.S. inventories at 16-year highs

Crude oil futures closed lower yesterday as inventories in the United States jumped to a 16 year high.

Even though, crude oil futures have now closed above 50 dollars a barrel for five consecutive sessions.

Light, sweet crude for May delivery settled down $1.21 or 2.2%, at $52.77 a barrel on the New York Mercantile Exchange. May Brent crude on the ICE futures exchange settled $1.75 lower at $51.75 a barrel.

Oil Traders Blog is a website for active online oil futures traders. We provide research and relevant oil and energy related news for the oil trader or daytrader.

Oil Futures Down Ahead of Inventories

Crude oil futures fell Wednesday in Asia as traders exited long positions ahead of weekly U.S. government oil data that may show further increases in the country's crude stockpiles.

A similar report late Tuesday from an industry group showed inventories surged by 4.6 million barrels last week, well above analysts' expectations.

Oil Traders Blog is a website for active online oil futures traders. We provide research and relevant oil and energy related news for the oil trader or daytrader.

Paul Krugman: the U.S. Will Have to “Seize” Big Banks

Nobel laureate economist Paul Krugman said the U.S. will eventually have to “seize” big banks as the economic and financial crisis deepens.

“In the end, we’ll come to it,” Krugman said in an interview with Bloomberg Television today, referring to nationalizing banks. “You guarantee the liabilities of everybody but seize the big ones.”

He also said the U.S. economy won’t stabilize until “late in the year.” Paul Krugman joins Stiglitz, another Nobel laureate to express his concerns over this bank plan.

Oil Traders Blog is a website for active online oil futures traders. We provide research and relevant oil and energy related news for the oil trader or daytrader.
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