I answered your question above. This article has much detailed explaination. https://www.wsj.com/articles/the-do...ding-workarounds-11559155440?mod=hp_lead_pos8 U.S. allies, looking to buck American control over international trade, are developing alternate systems that don’t rely on U.S. currency. The catalyst was the Trump administration’s decision last year to reimpose trade sanctions on Iran after pulling out of the 2015 nuclear-weapons deal. The U.K., Germany and France didn’t support the sanctions, which include a ban on dollar transactions with Iranian banks. So they are fine-tuning a system to enable companies to trade with Iran without using dollars. India wasn’t happy either. Iran is a longtime trading partner, and India wants Iranian oil. India began using a similar alternative system in November, and shipping records show it already is being used by international companies to trade with Iranian businesses subject to sanctions. Global trade runs on dollars, giving the U.S. extraordinary power over nearly every entity that imports or exports anything anywhere. That clout has long frustrated America’s enemies, making them vulnerable to U.S. trade sanctions. China and Russia, also eager to break free of U.S. control, are promoting their own alternatives to the global bank-transfer system, which the U.S. effectively controls, and are striking deals to trade with yuan and rubles instead of dollars. ... In congressional testimony in March, Treasury Department undersecretary Sigal Mandelker said that “those who engage in activities that run afoul of U.S. sanctions risk severe consequences, including losing access to the U.S. financial system and the ability to do business with the United States.” ... The dollar’s status dates back to the end of World War II, when the U.S. economy was the world’s most robust and dollars were plentiful. The currency’s liquidity, and the efficient U.S. banking system anchored by the Federal Reserve, mean trading in dollars is much less expensive and more convenient than using other currencies, says Craig Pirrong, a University of Houston professor who studies payment systems. Here’s how it works: A Canadian lumber company sells boards to a French buyer. The buyer’s bank in France and the seller’s bank in Canada settle the payment, in dollars, via “correspondent banks” that have accounts at the Fed. The money is transferred seamlessly between the banks’ Fed accounts because their status as correspondent banks means they are seen as safe counterparties. The use of these accounts, the U.S. says, means every transaction technically touches U.S. soil, giving it legal jurisdiction. Because using most other currencies is relatively inconvenient and expensive, many countries and companies will do whatever the U.S. requires to maintain access to dollars. ... India’s system is being used already. Although it is supposed to facilitate trade involving only nonsanctioned entities and goods, a Wall Street Journal review of Indian customs records shows it is allowing companies to trade with Iranian entities named on the U.S. sanctions list. On Jan. 24, Punjab Bevel Gears Ltd., a parts manufacturer in Ghaziabad, India, sent nearly $71,000 of tractor components to Iran Tractor Manufacturing Co. Treasury classifies the company as a “specially designated global terrorist,” and says it can sanction any company anywhere in the world that trades with the Iranian company. Iran Tractor didn’t respond to a request for comment. Mohan Singh, who handles exports for Punjab Bevel Gears, says his company got paid through India’s payment mechanism. He says he wasn’t concerned that the buyer is on the sanctions list because “the Indian government has allowed export to Iran. That’s what we are doing.” The European effort may be the most serious threat to the U.S. dominance. “I want Europe to be a sovereign continent, not a vassal, and that means having totally independent financing instruments,” French Finance Minister Bruno Le Maire said at a press conference last year. In an op-ed around the same time, German Foreign Minister Heiko Maas wrote that it is “essential that we strengthen European autonomy by establishing payment channels independent of the U.S.”
Anybody has any insights on how IMO 2020 may influence ICE Gasoil contract? Because I was considering this change should give a premium to F20 ( at least for this year ), but I realized ICE has launched Marine Fuel 0.5 % contract on the side, so now I doubt ICE gasoil contract will reflect IMO 2020. The big boys may play this OTC in the relevant market. Thoughts?
07/16/2019 : Long X/Z/F gasoil butterfly @ 1.25. - I don't see any way IMO would devalue X and F compared to Z. If the increased demand is felt beforehand then X will get the boost before Z and if the increased demand is felt solely on F, then it should profit as well. - Seasonals
FWIW EH U/V is at its lowest while ethanol plants are closing because of corn price( and basis )...I took a few contracts.
@TraDaToR, If you are okay with this (if not, pls tell me, and I will stop), then I'd like to post a trade I just did now. CL butterfly. CLH20-2*CLM20+CLU20. Opened for 0.14. It's pretty low margin, slow, watching-paint-dry kinda trade which has a success rate of 10 years out of the last 10. Will hope to close it for a 0.50 point gain, which could take weeks (or months).
08/06/2019 : Short CL F/G/H fly @ 0.07 - The backwardation got really steep and the fly is really high. - Fear of recession and lower oil demand. - WTI isn't a good crude to produce IMO 2020 diesel compared to other grades. -Seasonals.
TraDator, I realise I do not have live prices for ZO, hence my inability to see the quotes you mentioned yesterday. With regards to CL, the butterfly above is good. It seems very overbought- however, it's very low in $ terms, so a correction of the fly and a fall to 0.0 say, will probably result in $70 in profits. Do you find comms eating into the profitability of these types of trades? Have a look at CLV19-CLZ19. That's at a yearly peak right now. Any opinions on this one?