May 24 (Bloomberg) -- Crude oil plunged in New York because of refinery shutdowns that may increase the glut of oil at Cushing, Oklahoma, the delivery point used for benchmark futures. Prices rose in London. London-traded Brent crude, traditionally cheaper, now costs $6.54 a barrel more than New York oil, a record premium. Brent is rising on concern that supply from Nigeria or Iran may be disrupted. A government report yesterday showed the surplus of West Texas Intermediate crude stored at Cushing is growing.
I'm far from big time, but i was at the wrong end of that trade... got beaten like a red headed stepchild... we live and learn
yea that trade has raped me... and to think yesterday I was even. At least I moved to short 321 rather than just the gasoline crack.. HO is stronger than CL.
Yeah, maybe it's just as simple as this Bloomberg statement. But after reading Bloomberg for quite a while, experience tells me Bloomberg almost always has it wrong. If this spread goes the other way tomorrow, they'll be talking about Nigeria...and you won't hear anything about Cushing. That said, one wonders why we're piling up so much crude at Cushing. Why isn't someone somewhere in the world, that is currently shipping to Cushing, instead shipping elsewhere where the price is higher? Maybe there is more crude around than we think. And too, Bloomberg (and other oil commentators) tend to view crude in isolation. I mean, when gold makes a big move down, stock market down big, maybe some of the oil players sold remembering the February period where traders sold everything. My guess is that WTI is more sensitive to those type of issues than Brent. OldTrader
Yes, well trading spreads is like Forex. They tell you how easy it is, then they sell you the vaseline, when you need it.