futures curve

COT Black: Futures Curve Twisting

By |2018-07-12T17:34:08+00:00July 12th, 2018|Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

There is an interesting, ongoing academic debate about what shape the crude oil futures curve “should” take. Quite naturally, it seems backwardation is the market baseline. Most people, I think, presume otherwise because of their familiarity with commodities like gold. Backwardation in that market implies a physical shortage. Unlike that precious metal, crude oil is [...]

COT Black: Diverging Like ’13?

By |2018-05-23T18:08:11+00:00May 23rd, 2018|Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

During the week of February 21, 2017, Money Managers (MGR) in the WTI futures market went all the way for higher oil prices. The CFTC Commitment of Traders (COT) report showed a then-record 405k net to the long side. For whatever reason(s), oil prices didn’t necessarily follow at least not in the same nearly direct [...]

The Narrative of Energy Inventories

By |2016-07-22T16:06:39+00:00July 22nd, 2016|Commodities, Economy, Federal Reserve/Monetary Policy, Markets, Stocks|

While there is a direct relationship between the steepness of contango in the oil futures curve and the amount of crude siphoned from the market to storage, it is not an immediate one. When crude prices originally collapsed starting in late 2014, twisting the WTI curve from backwardation to so far permanent contango (of varying [...]

Reading Curves and Finding Only the Death of Money

By |2016-01-11T18:58:21+00:00January 11th, 2016|Bonds, Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

When analyzing the full and true nature of the dissonance between the idea of continued recovery and the financial markets’ scenario for something much worse you realize that this is not a new occurrence. In curve after curve, negativity has been building for years. Financial curves are important because they tell us the health of [...]

Physical Crude Demand Backs Fed’s IP Estimates, Not Fed’s Economic Outlook

By |2015-12-16T18:02:36+00:00December 16th, 2015|Commodities, Economy, Federal Reserve/Monetary Policy, Markets|

Like industrial production, the condition of oil inventory in the US was updated today in contradiction of the expectations driving Federal Reserve models expecting “transitory” weakness to simply pass into history. Unlike the virtual conditions for the FOMC, crude oil markets are obliged to respect both the eurodollar and the physical realities of physical commodities. [...]

The Dramatically Shifted Baseline

By |2015-12-07T16:49:42+00:00December 7th, 2015|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Crude oil prices are exhibiting all the signs of an increasingly difficult funding environment. The front end of the futures curve is being bent dramatically in relation to even close maturities just outside the next few months. Such contango is the obvious imprint of finance, though that is not to say that economic expectations are [...]

It’s Small, But Gold Sticks Out

By |2015-08-19T15:23:34+00:00August 19th, 2015|Economy, Federal Reserve/Monetary Policy, Markets|

It was, apparently, just a one-day “dollar” reprieve for the crude complex as oil prices are pounded today across the board even after the FOMC statement (leak) release. Unsurprisingly, copper joined the depression as the September futures price traded as low as $2.2605 this morning ($2.273 as of this writing). That is, of course, a [...]

No ‘Dollar’ Bottom Yet

By |2015-08-06T11:49:33+00:00August 6th, 2015|Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

By most accounts, crude oil prices are still nearing their March lows. That would suggest that this version of “dollar” turmoil might be yet working its way toward levels of disorder previously seen in that last episode. That is misleading, as even crude prices are appreciably more stressed now than they were in March. From [...]