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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
Brent is the world Benchmark. It's the old IPE contract now traded on ICE. (Just FYI the ICE matching engine is in Chicago not London). It is financially settled against an index.
WTI used to be the world Benchmark, but as US production has changed it has become a land locked crude. It's technically a "Light Sweet Crude" contract and is traded on NYMEX/CME. It is physically delievered at Cushing OK.
Hence the fundamentals that drive each are very different.
From a trading perspective, both have similar volumes and liquidity.
Spot rates for the vessels have subsequently soared to fresh seven-year highs, making it even less viable to horde than it was.
Of course the question I ask myself, is why isn't the contango steeper? Is it just that earlier in the year the market expected the drop in prices to be a short sharp drop, while now we expect it to last a lot longer?
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
I think you'll find it's more analysis than specific trades but if you have some idea's you'd like to discuss post away.
I personally trade quite a lot of Crude, but all spreads & butterflys. There are other's here who do trade crude outrights and I think quite a few who trade crude options. There's also a lot of people that watch this thread to keep themselves informed on crude fundamentals as it can have significant effect on other things they trade.