Who can expain the strategies of commercial participants? It's easy to see how they were selling off any rally in crude oil e.g on 7-Jan, 26-Jan, 3-Feb, 30-Mar etc. This is fair enough..I'd do the same in order to hedge production. What happened next since 29-Apr? Who makes the difference? Oil storage trades or what?
The market is ignoring fundamentals for now and is likely to do so. $40 is too cheap. I missed the the $35-$40 to get long for long term trade. So did many others. The day it falls to $40 every other trader on earth is going to get long especially as economic recovery is around the corner. Yes we are ignoring the current inventories but this is called 'futures' for a reason. Traders 'expect' conditions to improve and thus they are ignoring the inventories. As far as demand-supply gap goes, it isnt as much as is exaggerated in the news. As per my info currently supply excess is only around 1mb which is nothing a OPEC cut cant remove. As far as intrinsic value of oil is concerned, you may be right and we may even go to $10 . Here ill tell you what happened to me. In 2008 when oil was rallying, I shorted it around $86 when everyone was crying that true value of oil is $60. Guess what happened? Oil went to $120 (I got wiped out there) and eventually to $147. It did came back to $33 (now) but did it do my any good?
What is your 1)your average trade holding period ? 2)target in cents? 3)risk in cents you take? (for crude oil)
He he recovery is around a corner? Are You sure? This is PPT pumping money into equity markets worldwide via their proxies such as GS or MorganStanley..I did a small comparison of intraday dynamics of our index, which is RTS, and SPY...90% correlated same patterns.. The huge commercial participans shouldn't belive in such nonsence as "V-shape" recovery..
economics is one area where two opposing thoughts can be right at the same time. I btw never took this equity rally as an indication of economic recovery.
I trade natty professionally, therfore I have no answers for your questions. I trade a tiny fraction of oil derivatives for our producers for hedging programs. I do fully study oil techs/fundamentals however, along with natty.
If only I could fade your calls. I'd be rich in no time. If only there were a way to invite people who make ridiculous predictions like this to put their (small) money on the line in a side bet. More proof for my theory about people who use '3' instead of 'e' in their usernames. I'm telling you guys, the correlation is 100%!!