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Nymex Oil, Natgas Contracts Hit Record Open Interest

Tyler Durden's picture



Something is about to break. Everyone has moved from one side of the boat, to the other. What happens next is anyone's guess. And this happens just as the CME announced it is expanding its daily lock limits for crude trading from $10 to $20 just for the day. We are speechless at this update as there is no possible way to describe this as reasonable risk management.



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Thu, 05/05/2011 - 15:30 | 1244595 bob_dabolina
bob_dabolina's picture

It's a fuckin' par-tay

Thu, 05/05/2011 - 20:12 | 1245863 In Fed We Trust
In Fed We Trust's picture



You talk about them never rasing the margin on S&P, as they have silver 5 times this week, but what about crude in 2008?

I dont remember any margin increases as oil ran up to $147.

It's obvious the exchanges have control over the underlying market thru "margin rates"

Thu, 05/05/2011 - 22:47 | 1246237 Shermanium
Shermanium's picture


Thu, 05/05/2011 - 15:32 | 1244597 CPL
CPL's picture

Mo'Oil, MO'Problems...


Just snapped like a rubber band holding a brick.  Look out below people.

Thu, 05/05/2011 - 15:51 | 1244720 CPL
CPL's picture

HOly fuck...bottom dropped out of it.  SL triggers are going batshit insane.


I'm seeing zero buying volume, friday is going to be very very weak. 

Thu, 05/05/2011 - 16:36 | 1245051 SheepDog-One
SheepDog-One's picture

And everyone is in on all time high margins as well. History may not repeat itself exactly, but it sure does rhyme well.

Thu, 05/05/2011 - 15:32 | 1244602 Quinvarius
Quinvarius's picture

This is people running from the government credit card.  They have come to subsidize the commodity markets by eating giant losses.

Thu, 05/05/2011 - 15:32 | 1244605 collegepunk
collegepunk's picture

we need a system restart

Thu, 05/05/2011 - 15:40 | 1244645 CPL
CPL's picture

You are going to get one.  If the paper trades aren't in line with the actual delivery costs/price then this is going to get very, very, very strange.  That reserve stockpiled that Obama talked about will be gone in two days because of hoarding, and the economy is going to seize up again.


More than likely drop dead for good.

Thu, 05/05/2011 - 15:45 | 1244676 hambone
hambone's picture


Thu, 05/05/2011 - 15:33 | 1244607 Hephasteus
Hephasteus's picture

Just a little texas hedging till we finally whip ghaddafi and libya and iran. Should be no trouble. LOL

Thu, 05/05/2011 - 15:30 | 1244609 chunkylover42
chunkylover42's picture

darn those speculators.  oh wait, we like it when the prices are going in THIS direction.

Thu, 05/05/2011 - 15:33 | 1244619 CPL
CPL's picture

On a retail end it's awesome...but last time it did it the market tanked into the 6000 range....then all the world governments started to print money hand over fist.


Anyone care to see if history repeats itself.


This's Canada's turn along with the rest of BRIC.

Thu, 05/05/2011 - 16:24 | 1244972 SheepDog-One
SheepDog-One's picture

The casino got everyone in, then turned off the lights. Who now will step up and buy oil when they see in minutes they change the entire rules of the game? This is going nowhere, wouldnt be surprised to see flash crashes everywhere.

Thu, 05/05/2011 - 15:55 | 1244746 traderjoe
traderjoe's picture

Yea, right? 5 silver margin hikes in one week and they open up the oil limit to allow it to go down. 

"All of your monies are belong to us..."

Thu, 05/05/2011 - 15:34 | 1244614 jus_lite_reading
jus_lite_reading's picture

YUP!!! The big reset button in the sky is about to be pushed.... sorry folks... good luck


We have only a few months left...

Thu, 05/05/2011 - 15:55 | 1244750 Temporis
Temporis's picture

I take your planet X and raise you one "Second coming of Christ".

Thu, 05/05/2011 - 15:56 | 1244757 jus_lite_reading
jus_lite_reading's picture

Is he a giant asteroid?

Thu, 05/05/2011 - 16:03 | 1244828 Temporis
Temporis's picture

This website claims Jesus will make a comeback on May 21's 2011 and the earth will be destroid on October 21'st 2011.

Whats funny is your "Planet X" will pass in front of the earth on October 19th...


What are the odds.

Thu, 05/05/2011 - 16:28 | 1245020 Sophist Economicus
Sophist Economicus's picture

Well, if he's a hemorrhoid, it's timmay...Saw it for a fact on the Banzai poster

Thu, 05/05/2011 - 22:51 | 1246240 Yen Cross
Yen Cross's picture

Cute. Gigante Erectus.

Thu, 05/05/2011 - 16:05 | 1244823 Bob
Bob's picture

Thanks for the hot tip on ANGST.

Thu, 05/05/2011 - 15:34 | 1244617 Alert
Alert's picture

I'm sorry...what does this mean?  Oil/Gas going up or down?

Thu, 05/05/2011 - 15:36 | 1244628 hedgeless_horseman
hedgeless_horseman's picture


Thu, 05/05/2011 - 15:43 | 1244664 Drag Racer
Drag Racer's picture



once again cnbc nails it in their forcasting

The Next Target for Oil is $124

Thu, 05/05/2011 - 15:48 | 1244697 Re-Discovery
Re-Discovery's picture

(that one always gets me, cant stop giggling on that answer.)

Thu, 05/05/2011 - 15:37 | 1244636 CPL
CPL's picture

Down and the anchor isn't tied to anything.  It's just spinning out of control taking out anyone that hedged on inflation.  basically all the banks are going to need another TARP.


This time it'll cost four trillion.

Thu, 05/05/2011 - 17:13 | 1245220 Mentaliusanything
Mentaliusanything's picture

I wonder if AIG is still in the business of covering errors in judgement. If they are then.........

Thu, 05/05/2011 - 15:35 | 1244620 tecno242
tecno242's picture

" Everyone has moved from one side of the boat, to the other. What happens next is anyone's guess."

It capsizes?

Thu, 05/05/2011 - 15:47 | 1244721 Re-Discovery
Re-Discovery's picture

Nope.  Captain Bernanke orders them all to run back to the other side boat to balance things out.  In T minus 5 . . .4 . . .3 . . .2 . . .

Thu, 05/05/2011 - 15:53 | 1244736 AndyMan
AndyMan's picture

No no, everyone familiar with maritime traditions knows that when a boat is sinking, the only solution is to print more money.

Thu, 05/05/2011 - 15:33 | 1244624 saifstolemythesis
saifstolemythesis's picture

May 21st is the end of the world.

Thu, 05/05/2011 - 15:39 | 1244655 jus_lite_reading
jus_lite_reading's picture

Try Sept 20-21st...... 4 major comets coming and 1 will hit the earth

Thu, 05/05/2011 - 16:05 | 1244839 Bob
Bob's picture

Sad thing is that I've already bookmarked the link and am musing about shorts to play.

Thu, 05/05/2011 - 16:24 | 1244990 MayIMommaDogFac...
MayIMommaDogFace2theBananaPatch's picture

They'll print their way through a comet-crash too.  It's the only thing they know.

Thu, 05/05/2011 - 17:08 | 1245183 Bob
Bob's picture

I know, I wrack my brain for an issue that would absolutely have to take a hit on a disaster and I just can't find it!  That's how fucked up things are. 

Thu, 05/05/2011 - 17:42 | 1245323 MachoMan
MachoMan's picture

The shorts of the best looking woman at arms length so you can play the "let's screw on last time before we die" line.

If you don't die, then you can feed her some canned hamz afterward...  reduce the inventory and all...  so she doesn't feel cheap and what not.

Thu, 05/05/2011 - 15:36 | 1244627 gordengeko
gordengeko's picture

I think they are pissed off with silver.

Thu, 05/05/2011 - 15:34 | 1244632 mrdenis
mrdenis's picture

Remember a few weeks ago the news about an options trader who bought 100,000 July 2011 puts with a strike price of 25 for 0.10 each? That 1 million dollar investment (remember each put is for 100 shares) is now worth $6.5 million 'cause those puts are now trading for 0.65. .....Ben is tat U ?

Thu, 05/05/2011 - 15:56 | 1244775 Urban Redneck
Urban Redneck's picture

July 2011 puts, it's not a profit until the trade is closed.

Thu, 05/05/2011 - 16:24 | 1244988 SheepDog-One
SheepDog-One's picture

$6.5 million wouldnt even be pocket change for a few seconds for the Bernank.

Thu, 05/05/2011 - 15:35 | 1244634 6 String
6 String's picture

WTF? Low oil good for 90% of the population. Low stock prices bad for 10% I thought?


Thu, 05/05/2011 - 15:35 | 1244637 LeftCoastRefugee
LeftCoastRefugee's picture

BTFD......maybe one time too many......

Thu, 05/05/2011 - 15:37 | 1244647 Sutton
Sutton's picture

How do you move the limits same day?

Talk about moving the goalposts.

If I did in a 7-11 what the Lords do daily in the markets, I'd be locked up for life.

Thu, 05/05/2011 - 15:37 | 1244650 LawsofPhysics
LawsofPhysics's picture

Massive dis-connection in everything paper relative to all things physical.  What else do you expect to start happening?

Thu, 05/05/2011 - 15:38 | 1244652 wirtschaftswunder
wirtschaftswunder's picture

How can gold be down $48?

Thu, 05/05/2011 - 15:41 | 1244654 nobusiness
nobusiness's picture

3 PM Margin calls must have really hurt.

Thu, 05/05/2011 - 15:39 | 1244657 catch edge ghost
catch edge ghost's picture

Oh look, more hyper controlled inflation.

To be continued... 

Thu, 05/05/2011 - 15:42 | 1244663 entendance
entendance's picture

The secret to winning big in the market is not to be right all the time but to lose the least amount of money possible when you are wrong. As long as you win larger than you lose, you will be a profitable trader at the end of each year. Pride, ego and stubbornness prevents a trader from reaching the levels that very few can master.
"Who should I try to dissuade from trading?"

Thu, 05/05/2011 - 15:41 | 1244672 chaunceyG
chaunceyG's picture

Tyler Durden = Lloyd Blankfein

Thanks for all the laughs guys! Its been a riot watching you all pile into Gold, Silver, Crude and any other useless future we could scare you into giving us our hard earned dollars for.  Well at least some day you can look back and have a good laugh because over a long enough time line, the bank account of everyone falls to Zero...

THis is ZeroHedge signing off!

Thu, 05/05/2011 - 16:03 | 1244815 whstlblwr
whstlblwr's picture

Well, you wrong there. I buy silver ZH recommendation mid $20's, then they post time to sell early in week. You can look up. One Tyler even post in comments time to sell (after I sell).

But anyone buy stocks from anonymous blog, not too smart anyway. I just agree, and great information here.

And is comet HOAX. I don't click link because maybe virus. But search of NASA and comet is nothing.

Fri, 05/06/2011 - 02:40 | 1246534 ZFiNX
ZFiNX's picture;orb=1;cov=0;log=0;ca...

That sure ain't no virus, cross-check the earth-sun-"comet" alignments and earthquake dates.


Even better, adjust the date to December 21, 2012.

Thu, 05/05/2011 - 16:39 | 1245084 LawsofPhysics
LawsofPhysics's picture

No exactly.  I just spent a week buying physical with paper bought at 19 for silver.  Becoming my own bank.  Do you need a loan?

Thu, 05/05/2011 - 15:44 | 1244675 NOTW777
NOTW777's picture

this is shock and awe preparation for QE3.  no wonder they found OBL sunday

Thu, 05/05/2011 - 15:43 | 1244682 Tracerfan
Tracerfan's picture

The CME is not an exchange.  It is a tool of the Fed and the bankrupt Fascist U.S. of A.

I would not touch any commodity, currency or "product" on this garbage "exchange".

Watch the Saudis and Russians start trading crude on a real exchange within the next year, and it won't be in fiat dollars.

Thu, 05/05/2011 - 16:28 | 1245002 SheepDog-One
SheepDog-One's picture

And the Chinese.

Thu, 05/05/2011 - 15:44 | 1244691 EscapeKey
EscapeKey's picture

Hang on, so they increased it for oil on the day of the slide???

Yeah, no conspiracy theory here, this is clearly entirely organic behaviour. It's "simply chance". Like winning 3 slot machines in succession. "It happens." (in a Casino'esque way)

The dam is about to break. We've arrived at the gates of the endgame.

Thu, 05/05/2011 - 15:49 | 1244728 Dont Taze Me Bro
Dont Taze Me Bro's picture

They are either crazy or very stupid. (problly both?)

Why even have bother to have down limits, if you are going to increase the range on a crash day? It makes no sense.



Thu, 05/05/2011 - 15:50 | 1244729 sasebo
sasebo's picture

Hold on to your ass-ets . 

Who's selling? The greedy assholes who control all the stocks & markets. You know, the TBTF's. They just stopped buying & started going short.  Trying to panic retail just like in gold & silver. Just don't sell low & turn around & buy high.


Thu, 05/05/2011 - 15:55 | 1244748 chaunceyG
chaunceyG's picture

"Watch the Saudis and Russians start trading crude on a real exchange ..."

you should go work there, I'm sure it will be the free market paradise you are looking for.

Thu, 05/05/2011 - 16:26 | 1245012 SheepDog-One
SheepDog-One's picture

Actually Russia is probably a far more free and fair place to live today.

Thu, 05/05/2011 - 16:42 | 1245087 LawsofPhysics
LawsofPhysics's picture

Yes, all black markets are. 

Thu, 05/05/2011 - 16:06 | 1244761 citrine
citrine's picture

In 2008 crude lost $16 on some days, so there is enough room for additional drops

Thu, 05/05/2011 - 16:04 | 1244817 mogul rider
mogul rider's picture

Beware the Ides of April thru March

Thu, 05/05/2011 - 16:05 | 1244838 What_Me_Worry
What_Me_Worry's picture

OMG.  I JUST filled up my gas can for the lawn mower last night, too.  I am now the bagholder of 2 gallons of gas I paid $4.25/gal for.

I also had 100 USO Jun 36 Puts.  I think those two should cancel each other out.

Poor, poor silver.  I can hear Blythe cackling right now.

Thu, 05/05/2011 - 16:08 | 1244850 r101958
r101958's picture

How about this..... tomorrow the UE rate goes up to 9.1 or 9.2?

Thu, 05/05/2011 - 16:08 | 1244853 ivars
ivars's picture

By the way, I predicted this early May dip in Brent oil prices already on February 6th:

That is , Brent 100-110 USD.

Today, Brent is 110 USD. That means that bottom is very close, this week or early next week. And that will be the last bottom that is so low in many years to come.

What follows is a rapid increase in June-July to 140 USD (QE3?)

Thu, 05/05/2011 - 16:13 | 1244888 r101958
r101958's picture

...on this I may actually agree with you Ivars. We may get a nasty UE surprise tomorrow....

Thu, 05/05/2011 - 16:30 | 1245021 SheepDog-One
SheepDog-One's picture

I think thats exactly it, NFP was out to the criminal syndicate this morning or last nite, thats what we saw today, the re-positioning short.

Thu, 05/05/2011 - 16:09 | 1244879 Gargamel
Gargamel's picture


We must have you only invest in things that do not effect real prices.   Do this or we will attack you.   Unemployment up!  Prices up! and QE2 ending. debt limit about to be reached. another 2 tril to be requested for this year.

I can tell you one thing for certain.   This does not end nicely.  The financial system is dead already and we are just playing music until that is realized.   the fiat experiment that took the world off the gold standard in 1974 was a failure.

Dollar R.I.P

Thu, 05/05/2011 - 16:14 | 1244907 r101958
r101958's picture

True Garg.....if this has not been caused by some surprise (perhaps UE% rise) of which we remain ignorant then it was caused by something else (arm twisting, coercion, manipulation) which will cause other unforeseen consequences.

Thu, 05/05/2011 - 16:25 | 1244982 FranSix
FranSix's picture

I would surmise that the risk cartels are strongly positioned in credit default swaps as the counterparty to lenders in the commodity trade.

Thu, 05/05/2011 - 16:26 | 1245006 z123
z123's picture

    9 weeks silver gains evaparoted in 4 days

Thu, 05/05/2011 - 16:27 | 1245014 I am a Man I am...
I am a Man I am Forty's picture

Fuck, JPM was just about to collapse (sarc)

Thu, 05/05/2011 - 16:31 | 1245024 malek
malek's picture

That is totally reasonable risk management, and when oil is down to $35 again, they switch daily lock limits for crude trading back to $.01 !!

Just like of Mark-To-Market for the upswing, and Mark-to-Maturity/Model/Myth for the downswing.
It's the free markets, stupid!

Thu, 05/05/2011 - 16:50 | 1245112 r101958
r101958's picture

When oil is down to $35 won't be able to get any because it won't be brought to market for that price.

Thu, 05/05/2011 - 16:51 | 1245116 gunsmoke011
gunsmoke011's picture

Does the CME not have any rules they must abide by - or do they just make them up on the fly? To suspend lock limit FOR ONE DAY ONLY - on a down day pretty much says all you need to know about who they are looking out for. wonder how long it will take for the law suits to start piling up

Thu, 05/05/2011 - 17:00 | 1245160 BlackholeDivestment
BlackholeDivestment's picture Drunken Bitchez, the BTFD Cup of Fornication overflow(s) and the self devouring beast, compelled to run where it must go.



Thu, 05/05/2011 - 17:17 | 1245205 AC_Doctor
AC_Doctor's picture

CME = JP Morgue commodity pimps who tell the CTFC whores what to do and how they want the show run.

Let's see how Blythe is going to pull off July's silver COMEX deliveries with no fucking available physical.  The manufacturer's just might need a couple of 1000 oz. bars and not Blythe's hush-hush dollar premiums...

Thu, 05/05/2011 - 17:16 | 1245215 ForWhomTheTollBuilds
ForWhomTheTollBuilds's picture

Hold on a second...

Does this really mean that the comex people change the rules on a minute-by-minute basis as directed by their largest traders?  The limit trading for oil was changed "just for today" to promote the existing (violent) direction of the market?


Am I the only one scared to death of what this actually means?  If there are people powerful enough to affect these kinds of rule changes with one phone call on a minute by minute basis, then there is truly no hope for the current system (any of it).


Im still hoarding physical commodities, but I don't see how I will be able to trade or even hold them in the future without committing jailable offences on a daily basis.  Is this the real reason gold goes "to infinity" in the last few days?

Thu, 05/05/2011 - 17:33 | 1245273 CrashisOptimistic
CrashisOptimistic's picture

As has been said, forget gold and silver.  Civilization does not depend on them.

Oil is God.  Oil is everything.  Society depends on it.  

The Russians have gasoline shortages and they instituted a plan of export duties today that work to achieve the goal they seek of sufficient domestic gasoline When Oil Is Less Than $100.

Russia is the big kahuna.  The Saudis are now exposed as having no maneuvering room.  They could not fill in for Libya.  Russia decides things now, and nothing good will come of that.

But beyond all these increments of bark on trees, keep track of the forest -- which says oil production can't keep up with consumption.  After all the price jumps in either direction are done, that will still be true.

Thu, 05/05/2011 - 18:37 | 1245439 StarvingLion
StarvingLion's picture

Society depends on it.

Johann Sebastian Bach awoke from the dead in 2011: "The music, the architecture, the awesome killing machines, the sheeple...holy fuck, this is what oil is all about???  Back to the grave I go!"

The Kingdom: Debauchery

Russia: Alcoholism

Earth in General:  Ecological Collapse

Yeah Baby...what we will do without black gold and our "civilization".  Like maybe not bite the dust as a species long before the sun conks out?

Thu, 05/05/2011 - 17:47 | 1245335 r101958
r101958's picture

good points crash.

Thu, 05/05/2011 - 17:52 | 1245357 Poor Grogman
Poor Grogman's picture

The Empire Strikes Back.

"We will annihilate them with one decisive blow"

Thu, 05/05/2011 - 22:46 | 1246233 Yen Cross
Yen Cross's picture

LNG australia?

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