Huge Build in Crude Inventory

Discussion in 'Energy Futures' started by Landis82, Jan 7, 2009.

  1. All the way across the board.

    +3.33 million for gasoline

    +6.68 million for crude.


    Expectation was for a mere +1.5 million build in crude.

    Wowwwww!!!!
    :eek:
     
  2. Yep. Incredible. Cushing is at capacity. which might explain why the crude front spread is nearly $5 discount.

    The whole European issue with NG from Russia is interesting. The spread between the Brent and WTI is widening further.
     
  3. All of the coal, oil service, and commodity stocks have had a huge run since just around Xmas time. In some cases, 30-40% moves!

    Time for the OIH, and the rest of this group to retrace a bit.

    I'm just simply amazed how PTEN has rallied 30% even though NG has done absolutely nothing.

    Even as PTEN ( land based NG driller ) announced that their rig count fell off a cliff last month, with 213 rigs working, as opposed to much higher levels the previous month.

    For the 3 months ending December, the company stated that the average rig count was 252.

    Some of these guys in the oil service, and especially the NG patch seem to be trading at way too "frothy" of a valuation.
     
  4. its going to be interesting to see what the chinese do with oil overnight,
    cos if they sell it down even more then thats great for us as itl be a huge steep crash so be can buy in at the lows for the rebound.

    if they rise it back up cos of russia, well we get to just let it rise, and then double up on this elling trade once the russian gas stuff is sorted!! :) :D :p :cool:
     
  5. It's obvious why, just look at the Feb/Mar spread.

    FREE MONEY! If you have the capital required for delivery & storage.
     
  6. Yup., +$8 now.
    Wish I had a tanker!
    :D
     
  7. The crude contango is huge,This follows another epic build at Cushing, Oklahoma - the physical delivery point for Nymex WTI. The facility is now holding a record 33m barrels, which means it only has about 1m barrels of capacity spare. Until the Cushing scenario is resolved (unlikely until the contango in WTI disappears), the Nymex light sweet crude contract remains a pretty useless global price benchmark. The Brent/wti spread means that the US is importing less Crude.


    [​IMG]
     
  8. [​IMG]


    the RBOB y Heat Spread are in a Bull Rally, Most refineries will profit from this.
     
  9. Yeah, too bad all capacity is pretty much gone.

    February should get interesting. This inventory build up is going to get dumped.

    I don't know of the exact details of the situation, but I think that more oil will be delivered than capacity available. Some may have to start dumping in the physical market below the contract price. Just some random thoughts.

    I wonder if anyone has ever observed a situation like this.
     
  10. http://www.elitetrader.com/vb/showthread.php?s=&threadid=148310&perpage=6&pagenumber=5

    A weak front month typically means stronger differentials for cash grades. A trans-Atlantic spread in favor of Brent also is supportive of cash crudes.
     
    #10     Jan 15, 2009