Discussion in 'Commodity Futures' started by atrocious, Dec 2, 2010.
$11 seems a little rich for early December - anybody know fundamentally why they're up here?
European commercials are short supply, and they don't mind paying for the trans-Atlantic barge freight.
RBOB crack has been rich IMO since the end of hurricane season. Usually you get the seasonal heating "sell the RBOB buy the HO" refinery run switch but this one has kept its legs. Commercials are buying if you look at the Clearport and ICE LCH reports.
From Bloomberg on Dec. 02:
"European gasoline barge prices rose to the highest level this year as Royal Dutch Shell Plc bought for a fourth day. The fuelâs crack, or premium to crude, widened to a four-month high.
Gasoil futures traded on Londonâs ICE Futures Europe exchange gained on increasingly cold temperatures in the region. The crack spread expanded. "
From Bloomberg on Nov. 19: "European gasolineâs premium to Brent crude was close to the highest level in five weeks as stockpiles in the region dropped to the lowest level in more than a year.
Gasoline barges advanced as Gunvor International Ltd. and Total SA bought the fuel. Propaneâs premium to naphtha narrowed, snapping nine days of gains. "
From my personal observations trading, the ICE GASOIL Crack just seems to keep a bid, even with the Nymex HO Crack selling off. It just seems to hang tough.
If you want to play crack spreads, then keep an eye out for a 1-2 month short of HOCL. Not sure about the gas crack.
For the Heating Oil crack I am specifically looking at the HDD forward curve and the short-term Nat Gas forward curve. Then, of course, the API/DoE data for the fundamental supply component.
careful being short rb cracks and rb time spreads. as we've seen in the last 3 months gas has been rallying off of fundamental news (fcc problems) and has been easing a lot slower. ny gas tightness it not over, but should see a decent amount of resupply mid-jan.
crude does not feel good, dont know many details but crude guys i talk to dont like it (not talking about flat price).
sell pops and take profits quick. seasonally, gas cracks are high but this is not a typical gas season.
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