So the better question: How do future markets compare w/ net transactions to OTC/cash markets, with respect to oil ? In other words, is the cost to move price in future markets marginally less than moving price in cash markets (quoted to index prices moved most by futs markets) ?
The Bloomberg story did not attribute a cause to the huge oversupply in this most recent case but I do know that the blog I read on the prior supply runup most definetely did - no market, no refinery demand for their level of sulphur. On the rest of your question, I'm clueless - no training or experience here. Still convinced though the technical short opening I've been looking for for weeks in the oil charts could emerge in a heartbeat.
Yep. Once again the CFTC has absolutely NO CLUE what they are doing . . . just like when Enron was allowed to "game" the power-grid in California.
Landis82, Sure enough and about the only thing in the AT article which was off has to do with position limits, i.e. funds can circumvent Nymex limits via the mediation of swaps dealers. Not specific to oil but commodities-in-general: <i>Nearly $9 out of every $10 of index-fund money is not traded directly on the commodity exchanges, but instead goes through dealers that belong to the International Swaps and Derivatives Association (ISDA). These swaps dealers lay off their speculative risk on the organized commodity markets, while effectively serving as market makers for the index funds. By using the ISDA as a conduit, the index funds get an exemption from position limits that are normally imposed on any other speculator, including the $1 in every $10 of index-fund money that does not go through the swaps dealers.</i> http://commitmentsoftraders.org/?p=32#more-32
What exactly do you short? I would like to short or buy puts on oil but don't know which stock or index to short. XLE maybe? Thanks. EDited: I didn't realize when I made my post that this was in the energy futures forum as I saw the title of this thread from the front page here.. So I guess you short futures on oil then?
C'mon guys, There are a limited number of supertankers available for supply in the world - even less so when considered on a regional basis. By warehousing oil in those tankers you effectively take supply off the market. As commodities become relatively inelastic, a small reduction in supply could equal a large increase in price. Intelligent response, considering. Wonder if anyone thought about that stateside? I wouldn't doubt that Iran is trying to engineer its own 'regime change' in the USA by forcing oil prices higher to anger the american people against the republican administration and usher in a obama presidency which they hope will be more friendly to their interests. The great game continues....
If the tankers are still there idling a month or two after the refineries that process this (relatively difficult to refine) crude are back from maintenenance, then you go can go back to watching your "Manchurian Candidate" dvds twice a day. Until then, chill out. This stuff happens from time to time. High sulphur crudes can only go to specific refineries that can process them. If they are down for maintenenance, the crude has to wait for them to come back up. No great game.