You can find weekly reports at fernleys or pf bassøe (now a part of pareto) for free: http://www.fearnleys.com/index.gan?id=293 http://www.pareto.no/no/PF-Bassoe/Weekly-Reports/2011.aspx PS: there's probably a whole lot of other shipbrokers with similar reports. Google.
If U.S. hedge funds were indeed piling into Brent crude (how about timezone/liquidity differences? do all these funds have offices in London?), then perhaps they would bring contango with them? There is none on ICE, and indeed even slight backwardation... Whereas it would cost you 12-18% annualized to buy and hold CL (a 200-300% cost hike from last year). So, guys, any other explanations? One of them is that it is Feds new counter-inflationary "measure"... once those evil creatures tasted the blood of manipulation in Treasuries, then liquid commodities should be their next natural target... let's say rather than keeping inflation in a tight band around 2%, we shall address the underlying supply-side factors and keep the front-month crude (West Texas only, why bother with Europe) in a tight band around $90 (or at least let's cap it from above and the inflationary-carry-trade will provide the floor). Ridiculous? Tin foil? Perhaps, but then it is your turn to provide alternative explanations why CL is 10% undervalued (as measured against the unmanipulated Brent benchmark)... but make sure your explanations don't create contango in Brent, because there is none. One corollary of mine is that betting on that spread convergence is betting against the Fed... it would take another Soros to bust them (barring transatlantic pipelines of course
"it would take another Soros to bust them " Despite the false premise of economic impotence, there is a substantial difference between taking on the Bank of England and The Fed.
Still climbing! What's interesting is there really is little in the way of consumer relief based on depressed WTI because the refined cracks have been blowing out too.
If they are indeed trying to cap it under $90, it may indicate that some news is cooking... "Relatively" low oil prices would be a good excuse for another round of inflationary money printing (QEIII... really?) The justification may run like this: "with major commodity prices such as the US crude oil largely unaffected by Fed's actions, resting firmly in the middle of last year's range, there is still significant potential for further controlled monetary easing without the risk of creating new asset bubbles" (manipulation intentional). QEIII would surely provide some momentum for the "US oil"? It would push it above $90 even without Soros. Speaking of which... have you heard from Jim Rogers recently? Forget about the $90 barrier (it's only in your minds. He predicts that crude will make new historical highs of... $200! Of course he is a long term investor, with a decade-long horizon (he says so about his Chinese currency holdings). So you could easily go bust before his forecasts are eventually right (but once they do... think financials or euro shorts). And advocating oil, he conveniently forgets to mention that 5 cent daily loss (18% annual contango)... and that he owns a company that will charge you an asset management fee (at only half the usual mutual fund rate to be fair) on top of that contango... while as for buying and holding commodities... he himself probably invests in the hard asset directly or in the companies that produce it. I was always told that the best (cheapest) way to bet on commodities (currently beating his commodity ETNs by at least 18%) is to buy a non-diversified portfolio (or an ETF) concentrated in commodity producers (the stock market component can be probably even hedged away)... but surely he disagrees: Jim Rogers: Well, the best way to invest in Asia in my view is to buy commodities, because the Chinese have to buy cotton, they have to buy zinc, they have to buy oil, they have to buy natural resources because they don't have enough. .. Justin Rowlatt: So what about oil? I mean oil prices are pretty high, aren't they? Almost $100 a barrel. (Justin is with BBC, so "oil" means Brent for him) Are they really going to go higher do you think? Jim Rogers: Well, the surprise is going to be how high the price of oil stays and how high it goes, because Justin we have had no major elephant oil discoveries in over 40 years. (wrong: the Tupi field discovered by Petrobras in 2007 was the biggest one since 1976) The International Energy Agency is going around the world pleading with people to listen. Known reserves of oil are declining. It is not good news. Unless somebody discovers a lot of oil very quickly, prices are going to go much higher over the next decade. Justin Rowlatt: How high do you think the oil price could go then? Jim Rogers: Justin, the price of oil is going to make new highs. It will go over $150 a barrel. It will probably go over $200 a barrel. Justin Rowlatt: Over $200 a barrel? I mean that's a world record high, isn't it? Jim Rogers: Of course it is, but Justin, the world is running out of known reserves of oil. Maybe there is a lot of oil in the world, but if there is, we don't know where it is or how to get to it. Justin Rowlatt: You got the pre-salt deposits off the coast of Brazil, there is Arctic oil, I mean there are big reserves of oil yet to be tapped, aren't there? Jim Rogers: Justin, those reserves off the coast of Brazil are wonderful if you own them, but even the wildest and most optimistic estimates would only add one year's reserves to the world. The world is using 86 million barrels of oil everyday Justin. Even if it stays static or goes down a little bit, those finds off Brazil will make somebody rich, but they are not going to solve the world's problems. (right: Petrobras estimated that up to 1M barrels per day from Tupi are achievable, as their peak production figure, with a pilot production of 100,000 bpd starting in 2011-2012). And, if you know of a lot of oil in the Arctic, please tell us where it is, but it is going to be very difficult to get it out of there. ( http://jimrogers-investments.blogspot.com/2011/01/bbc-news-interview.html ) He does backtrack a bit from his gold infinite price forecasts... sure it looks toppy now we gave back a quarter of gains How about some predictions about future?
UK welcomes double dip? That should put the buoyant Brent to rest a bit: http://www.bbc.co.uk/news/business-12272717 In fact it did so yesterday (it was mostly Brent that was selling off, CL was stable), but that sort of frontrunning is just your event study 101. Some animals are more equal than others (as one Brit once put it...)
I don't think that moves that simply create more open interest is driving the spread. I'm sure there are many reasons, but I'm still not sold on the internals of speculator positions causing any kind of upward pressure. After all, it is futures trading right? Based off the spot price plus carry charges. Doesn't mean that more investors cause a crowding effect since it is a zero sum game after all.
The question is, is there any bottom for this price.. ???? actually an -10,40 and falling !!!!! If i am not wrong actually we are at the lows of 2009 !!!!