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Trading: Primarily Energy but also a little Equities, Fixed Income, Metals, U308 and Crypto.
Frequency: Many times daily
Duration: Never
Posts: 5,059 since Dec 2013
Thanks Given: 4,410
Thanks Received: 10,226
Strange market.
Aug/Sep spread is trading at a premium to Sep/Oct, Oct/Nov and Nov/Dec and flat with Dec/Jan! Don't see that often.
As bearish as the fundamentals are, it just 'feels' like the only thing holding this market down is June.
Trading: Primarily Energy but also a little Equities, Fixed Income, Metals, U308 and Crypto.
Frequency: Many times daily
Duration: Never
Posts: 5,059 since Dec 2013
Thanks Given: 4,410
Thanks Received: 10,226
Got me thinking so I ran some analysis.
Since the beginning of 2000 there have 1018 days where the month3-month4 spread settled higher than month4-month5 AND month5-month6 AND month6-month7 spreads.
Of those 1015 days, the market was in backwardation for 949 of them and in contango for just 69.
So if you say we have had approx 3600 trading days in this period, this equates to less than 2% of the time.
Pretty rare, but I must admit, not as Rare as I expected.
From a Seeking Alpha article "It's Time To Sell Oil: Don't Let The Decline In Inventories Fool You, Supply And Demand Remain Unbalanced" by Force Majeure
Moving onward from domestic to foreign oil production, the EIA reported yesterday that crude oil imports last week averaged just 6.54 million barrels per day. This was down a huge 905,000 barrels per day week-over-week and was off 820,000 barrels per day from the 1-year average. In fact, last week's imports were the second lowest this millennium, behind the 6.46 million barrels per day during the third week of May 2014. Unfortunately, this decline in imports was not due to a fundamental change in the international market, but rather a one or two-week fluke. Several cargo ships carrying 13 million barrels of crude oil were delayed leaving their ports. These ships have since departed and should arrive in US ports by the third week of May. Should this cargo to arrive on the market all at once, it would have the potential to boost US imports by 1.8 million barrels per day.
In fact, last week's surprising withdrawal can be blamed almost entirely on this anomalous, short-term drop in imports.