The post-Pfizer vaccine rush pushed most of the contango out of the WTI futures curve. The aftermath of the Georgia Senate vote, and with it dreams of even larger, more carefree fiscal “stimulus”, drained all the rest. As of this week, the entire crude curve is once more contango-free; backwardation front to back.The physical markets have been able to fundamentally [...]
In a sense, it’s being priced like a game of chicken. On the one side, there’s been vaccine-aphoria now combined with this week’s subsidy-mania driving narratives more than markets. Really not all that much higher in prices, certainly not anywhere in the neighborhood of the red-hot temperature of the rhetoric being used to describe these two particular developments. Oil’s up [...]
The Commodity Futures Trading Commission (CFTC) is in a bit of a tough spot. Being subject to the federal government shutdown meant shutting down the various Commitment of Traders (COT) reports for all the products listed on the exchange. There are a lot of them. Though the government and therefore the CFTC has reopened, it is going to be some [...]
Who can Jerome Powell thank for the PCE Deflator? Not Janet Yellen who handed off to him instead “transitory” factors. Nor was it globally synchronized growth which was supposed to have been the deciding element. Instead, it appears more and more that the only place where Chairman Powell might legitimately offer his gratitude is the US Congress. We have to [...]
Watching the crude oil market over the past few months has been a study in winding a rubber band, or a game of chicken. Each week it has been largely the same thing repeated: oil prices gently rise, backwardation in the futures curve keeps deepening, Money Managers in the futures market bet on higher oil, Dealers bet even more against [...]
US domestic stocks of crude oil continue to be quite high and now the futures curve is only a few pennies in the front month contract from being fully backwardated again. Contango is gone, which suggests that oil market is in sight of achieving some measure of balance. That anticipated equilibrium, however, is registering at less than $57 rather than [...]
There is a titanic struggle going on right now in the oil market. On the one side of the futures market are the usual pace setters, the money managers. Last week, the latest COT data available, they went the most net long since March. If it continues, it will close in on the most positive futures position since the record [...]
Oil prices have had a very good run for several months now. Dating back to the recent low reached June 21, WTI is up an impressive 35% to a new two-year high. Crude hasn’t traded at $57 since June 2015. During this latest increase, the oil futures curve has finally achieved backwardation (which isn’t necessarily permanent). The long-awaited normalization is [...]
The price of oil can’t seem to climb out of the $40’s despite a lot going for it at the moment. Oil prices matter right now as much as three years ago when they signaled serious trouble ahead. For them to get above $50 and then continue on would indicate for a lot of important places what everyone has expected [...]
Drillers are going to drill. What else can they do? OPEC can discuss cuts and maybe even stick to them for a while, but the rest of the world isn’t bound by those tactics. That is what they are, PR aimed at firming up prices. In the end, this story, as it has been from the beginning in late June [...]
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