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$200, $400 Oil by end of 2009, and 2010-12, respectively


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well, the awaited bounce in the stocks & oil didn't happen as expected. now i will give them a last chance to go up tomorrow, if the dow goes up above 8050 we will have bounce in oil, but i doubt it, so, highly possible we plunge hard next week towards 6000 dow and 25 oil

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well, the awaited bounce in the stocks & oil didn't happen as expected. now i will give them a last chance to go up tomorrow, if the dow goes up above 8050 we will have bounce in oil, but i doubt it, so, highly possible we plunge hard next week towards 6000 dow and 25 oil

 

Seemed like an impressive rally in the last hour last night. Without that, think the TA pointed firmly lower. Saying that, even with the last hour rally....

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well, the awaited bounce in the stocks & oil didn't happen as expected. now i will give them a last chance to go up tomorrow, if the dow goes up above 8050 we will have bounce in oil, but i doubt it, so, highly possible we plunge hard next week towards 6000 dow and 25 oil

 

amazing bounce to 38 , but , no, i don't see any bullishness in oil next week. i see new lows. Front page on CNBC.com like "OIL at 25" "Stocks plunge to its lowest levels since ....[put your favorite timeframe here]"

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http://ftalphaville.ft.com/blog/2009/02/18...he-oil-markets/

 

A ‘cancer’ in the oil markets?

Posted by Izabella Kaminska on Feb 18 13:46.

 

Olivier Jakob at Petromatrix has commendably taken a strong stance against the USO ETF fund over the last few weeks, or rather, exposed to what degree the fund’s market inexperience is causing all sorts of mayhem for the WTI contract. All of this, he says, is because the fund has now achieved ‘’critical mass’.

 

Unsurprisingly, his Wednesday note shows a similarly strong view:

 

Despite the flat price weakness on crude oil, the contango on the expiring spread continues to narrow, in a pattern very similar to the previous expiry. The convergence of the expiring contract is now being done pre-expiry on a narrowing of the spread rather than post-expiry on a flat price basis. This re-enforces our view that the extreme contango on the WTI contract is primarily due to market distortions created by the USO WTI ETF. This cancer to the oil markets is however not yet over as positions in the USO were increased further yesterday and now reach 93′000 WTI April Futures contract.

 

Read in first on Petromatrix: in our weekly note of Feb 9th we advised that passive investors ought to be overweight oil equities/underweight the WTI ETF. Goldman Sachs has put out this week a research note advising clients to be overweight commodity equities/underweight the commodity, but they are not yet mentioning the distortions created by the ETF on the WTI markets. In a separate note, Goldman has advised taking profit on the short flat price at the back of the curve and turning instead to buying the long dated spreads Dec9/Dec11.

 

Jakob certainly has a point. What’s more, it is becoming increasingly obvious that investors in the fund are really confused on the matter of contango and how it affects them. The point they need to understand is that oil is not cheap even at these levels if they are holding the position long-term and losing successively on the rolls.

 

Note here the fund’s performance, which shows a 22 per cent decline in the month of December. Crude fell in December but not quite as much as that. Of course it’s got worse. Yesterday alone the fund was down 8.3 per cent, while WTI itself was down 6.88 per cent.

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well, the awaited bounce in the stocks & oil didn't happen as expected. now i will give them a last chance to go up tomorrow, if the dow goes up above 8050 we will have bounce in oil, but i doubt it, so, highly possible we plunge hard next week towards 6000 dow and 25 oil

 

i transfer this call for this week and some part of next week. i am still not buying crude, waiting.

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oil right now (42.25) is at a good short position. the 42.50 support line is what divides a rally to 50s from a plunge to 20s. geometrically (in 5 min chart) it just got out of a rising wedge and not broke up. stop 43.00

 

i will try to short at 45 for the last time, if it breaks it, i will have to forget the idea of 20 oil

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finally! you've been putting off the rest of us who thought $35 oil was a good time to jump in...

 

well, tbond today confirmed deflation supporting 125 level, so 25-22 oil is nothing unreal , provided that dollar can hit 92 and higher with coming selloff in the dow to 6000/5500

but if it gets to 17.50, it will be the best bargain ever , specialy long term

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http://v2.ftalphaville.ft.com/blog/2009/02...ng-uso-oil-etf/

 

Regulator probing USO oil ETF

Posted by Izabella Kaminska on Feb 27 09:22.

 

The FT is reporting on Friday, along with all the other wires, that the CFTC is investigating the United States Oil Fund:

 

US federal regulators are investigating an investment vehicle that has amassed a 20 per cent stake in a crude oil contract traded in New York and London amid fears that its activities could be distorting the market.

 

The Commodity Futures Trade Commission is investigating the United States Oil Fund, an exchange-traded fund listed in New York, after its size surged in the past three months to 95,000 lots on the West Texas Intermediate contract for immediate delivery.

 

Stephen Schork of the Schork report, who has criticised the fund’s position in his most recent editions, says this on the matter:

 

Thanks to knock-on momentum from Wednesday’s post DOE rally, spot NYMEX crude oil for April delivery closed above $45 for the first time in two weeks on Thursday. However, last night word broke of the CFTC’s probe of the USO. There is no debate; the USO artificially impacted the Mar/Apr roll. If the CFTC does its job that is the conclusion it will come to. But, given what a crack job government regulatory bodies did in policing Madoff, we suppose anything is possible.

 

Meanwhile, another day, another structured reverse convertible product issued to the market linked to the ETF. This one from JP Morgan, according to SEC filings.

 

FT Alphaville has been reporting on the rise of these structured products issued by banks since last December 2008.

 

The products, which have mostly been short-term securities offering attractive coupons, effectively provide banks with downside protection on exposure to the USO. They do so by playing the volatility of the Oil Fund’s volatility measure the OVX. To read more about how they work click here.

 

The size of the ETF’s position in April WTI Nymex has meanwhile slightly fallen back since Thursday to 59,495 contracts versus 60,656. The fund is set to begin its roll into the May contract next week.

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well, tbond today confirmed deflation supporting 125 level, so 25-22 oil is nothing unreal , provided that dollar can hit 92 and higher with coming selloff in the dow to 6000/5500

but if it gets to 17.50, it will be the best bargain ever , specialy long term

 

Someone else planning for lower oil

 

Gazprom is prepared to adjust the budget and the investing program in 2009: the Russian gas monopolist plans to implement only economically feasible projects, if oil prices plunge to $25 per barrel.

 

Earlier made most pessimistic forecasts have never predicted oil prices lower than $32. The Russian government is adjusting the federal budget based on $41 per barrel. These days Gazprom has to cut the amount of its investment programs from 920.5 billion rubles to 713 billion rubles amid the global financial crisis.

 

 

http://www.russia-ic.com/news/show/7859/

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current 45.46 crude is at the line dividing bull and bear trend. going above -> 62 , below - 25

 

it also may trade range between 45 and 42 without decision during the rest of the week

 

next key point support in crude is 42.50 , if we break it we are going to go to 25 non-stop. i still think 25 oil is in the cards and if we get it, get ready for a big rally of +40 bucks.

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it also may trade range between 45 and 42 withiout decision during the rest of the week

 

ok, this is likely to be the case: we selloff to 42.00-41 from today to tomorrow. and then late friday, we bring it up to 43.50 or around, and next week start selling again to 25 (thursday-friday: first wave + second wave; next week: third wave)

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