If one takes delivery of May Crude (in Cushing, OK by default) is it not possible just to store it there and redeliver against a short in June or do they make you get it out of there unless you already have a storage agreement with Enbridge or Enterprise? Or is it something else? Otherwise this seems too simple to collect $37k at delivery per contract, pay for a few weeks storage on site and redeliver it, collecting another $20k or so. Please enlighten me as to what I'm missing...
There's no more storage space in Cushing. They are full. I think that is the gist of it. And storing Crude is a very expensive process, because crude is very toxic shit.
Thanks, I guess the way I previously used to think of it was that a long received delivery in Cushing, but it's more like the short just has to make delivery via a pipeline that is connected to Cushing. If Cushing happens to be full, you (as the long) still have to send that oil somewhere else.
So who has the bonafides? I want to know who was buying crude today at -40. Beats the heck out of drilling. Which, if any, publicly traded companies made a killing today buying crude they can store?
COMMERCIALS. Volume is very light as this is the last trading day for the May Contract and Thursday is First Notice Day. My best guess is that brokers are auto liquidating spec retail positions and Commercials who were short and intended to make delivery bought a few at very advantageous price points. At these price levels Commercials aren’t necessarily making a killing on average - but their trading desks are managing forward risk as best they can. They’re trying to control the bleeding.
You don't need bonafides, your broker does, they are the ones that got to be member of the Clearing. With gold they will give you an ACE at delivery why can't they do the same with oil? The broker should be in that list and willing to let you: https://www.cmegroup.com/clearing/f...urveillance/clearing-firms.html#clearingFirms
An FCM clearing Valero - sure. A broker clearing a retail spec account - no freaking way when it comes to physically settled energy. Not gonna happen.