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Oil Goes Berserk In Electronic Trading As WTI Passes $98
As Zero Hedge advised in early January when the severity of the Maghreb revolution was made all too clear to anyone not willing to stick their head in the CNBC sand, oil could well be the buy of a lifetime ahead of a downward spiral of unprecedented geopolitical proportions. Sure enough, today alone, WTI (April) has surged from $90 yesterday to over $98 in electronic trading (see below). Either this is some computer gone haywire in the closed session, or when America wakes up tomorrow we may be on the verge of another flash crash. As for Brent, it passed $108.50. As a reminder, and people forget this all too readily, each dollar jump in crude wipes out $100 billion in US GDP. That means that at face value, today's move in the commodity complex, may have taken out as much as 5% of annualized GDP when fully processed through the economy!
WTI (per netdania):
Brent:
And some crude observations from an otherwise calm Reuters:
Brent crude oil U.S. oil prices led the rally
The
"The market is on edge
"If you've
The
Brent
The March U.S. crude oil
Overall
The
Brent's after-hours rally forced the spread back out to $12.40 a barrel.
LIBYA UNSETTLES
In
On Sunday,
Ninety
"Libya
prices hit $108 a barrel for the first time since 2008 on Monday on
fears that spiraling violence in Libya could lead to wider supply
disruptions from the OPEC member.
to jump by more than $5, the most in over two years, as traders also
rushed to cover short positions in the key Brent/WTI spread, which had
blown out to a record $16 a barrel. The April spread narrowed to $10
during the day, but widened to over $12 in after-hours trade.
focus was on deadly clashes in Libya, where one oil firm was shutting
down some 100,000 barrels per day (bpd) of production and others
evacuated staff. The leader of the Al-Zuwayya tribe threatened oil
exports to the West would be cut off unless authorities stopped
violence.
about the potential for Middle East and North Africa supply
disruptions," said Mike Wittner, head of commodities research, Americas,
at Societe Generale.
got reports that actual disruptions are starting to occur, it's going to
have a supportive impact. A lot of it is high-quality crude and that is
important as well."
increasingly violent protests that appeared to put Muammar Gaddafi's
four decades of rule in jeopardy were the realization of weeks of
mounting concerns that Egypt-inspired unrest would seep into nearby oil producers.
oil futures, which have climbed more than $10 this year largely due to
the increasing geopolitical risk premium, jumped $3.22 a barrel, or 3.2
percent, to settle at $105.74 a barrel. They jumped another $2 to trade
as high as $108 in after-hours dealing, the highest since September 4,
2008.
contract, which expires on Tuesday, surged $5.22 a barrel to trade at
$91.42 a barrel in late-afternoon activity -- the highest in two weeks.
trading volume was less than one-third the 30-day average due to the
U.S. Presidents Day holiday, and the U.S. market won't issue an official
settlement until Tuesday.
more-active April contract jumped as much as $5.75 to a high of $95.47 a
barrel, at one point narrowing the Brent/WTI contract by nearly $3 to
$10 a barrel as traders covered short positions built up as the spread
ballooned from about $3 in January to a low of $16 last week.
Libya, scores were killed in anti-government protests as one of the
region's bloodiest revolts hit Tripoli for the first time, while army
units defected to the opposition and Gaddafi's son vowed to fight to the
last man standing.
Shaikh Faraj al Zuway, the leader of the Al-Zuwayya tribe in eastern
Libya, told Al Jazeera: "We will stop oil exports to Western countries
within 24 hours" should the violence not stop.
percent of Libyan oil exports come from the eastern region of
Cyrenaica, epicenter of the revolt, and unrest there could pose a graver
threat to oil supplies than in other nations if separatists target
infrastructure and look for a bigger slice of revenues, analysts say.
is a significant producer and exporter of good quality crude oil, and
threats by the tribal leader to stop production are worrisome," said
Christophe Barret, an oil analyst at Credit Agricole Corporate and
Investment Bank.
»
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Consumer spending and credit card use will be up! BTFR!
Clearly this surge in price is due to sudden EM demand from strong growth.
EM's have sophisticated energy diets now.
Those tanks, APC's, 'copters, jets, etc. take lots of petroleum. Heck, just think about how much (Q/G/K)adhafi is burning on his Caracas junket.
and now you know why oil is soaring. "Libya" is a symptom and in no way causing the oil price to soar. It's the "slight issue of various militaries" needing fuel i think.
Ragnarok, LOLOL. "strong growth"...gotta luv it. Great board.
Ya know all, as strange as this seems to 90% of America, I think it is safe to say that none of us are very surprised, amazed or bewildered with what is going on, and when gold reaches 1,500, and oil is 110 well ok then, just part of the process that we are aware of.
The sad part is most Americans have no idea what the "dollar" means outside of the fact it buys an Ipad, and most have no idea of POMO, derivatives, or monetization. And few govt. workers get it that it is over, high pensions, no health care costs, free meals for govt. workers. It is Over.
But when gas is $4.50 a gallon and bread is $5.50 a loaf. Then maybe, just maybe, "the March of Millions here."
would be surely interesting to see
On local news tonight (RI station) they stated signs that economy is picking up:
underwear sales are up as are sales of Venti Lattes
Everything is fine - as you were - nothing to worry about.
#clh WTI march contract is currently 92.56 on that little spike. Thanks fro the interuption Ragnarok.
Surely this is bullish for the oil companies! Oh wait....whose that guy in Libya again?
I love the smell of pain on Tuesday morning. I can smell it from here.
Im just glad we have been concentrating on otc derivitives the last decade rather than making sure out big tractor trailers were outfitted with natural gas engines.
what happens when our big truck companies go bankrupt from 7 dollar gas will we be hunting deer?
now i know why soros was buying delta airlines last week, just like peter schiff said circa 2007 they airlines will all be bought out by foreigners because they won't be able to afford gas in us dollar terms
Would now be a good time to top off the Suburban before the price hike Tuesday?
Hold off - I suggest buying the dips.
No shit Sherlock, only difference being mine is a Yukon...ugh. Oh well, the Taurus will be getting more miles as long as we are not snowed in.
Yes, fill the suburban and every can of gas that you can SAFELY store.
Think of it as more insurance... You might need to drive an ailing family member/friend to an ER when emergency responders are short fuel.
Heh, will be fun to see what the XRT does tomorrow....
as mentioned last friday, what about that cat at the fed who advised us that rising oil was gdp positive.
He must have been talking about oil exporters like Saudi Arabia and Canada
maybe so.
LA drivers will be luxuriating in $5 gas. Get your bus pass out Robo. LOL...
LA Libs want higher gas prices. WTF?
Libs everywhere are driving hybrids and electrics, best top off the f-250 tonight!
+ GULP
I didn't know you had to be a liberal to not like US dependence on foreign anything especially oil (wars). The Gulf of Mexico comes to mind, aside from the fact it's expensive and bad for your engine if it's gasoline you are burning.
Can't see how higher oil prices can benefit retailers, really...
Bicycle retailers?
It will keep pushing higher, IMO.
This jump in oil (+10.62% in one day, quite unusual) is the perfect sign the global economic recovery is accelerating.
If there is no demand, there is no jump in oil.
So there must be some pretty good demand out there.
I've converted the rest of my cash portfolio in AAPL and NFLX stocks.
hat tip to ya hamy. you sucked me in and buffaloed me a couple of times to your brand of humor. i didn't realize you were channeling harrywanger's idiocy, playing him for the fool until late in the game. took me a while to see the humor.
personally, i'm stocking up on Colavita Extra Virgin Olive Oil.
yes. i'm taking physical delivery. and yes, i CAN eat oil!
...and you can freeze it.
for the love of junk! let hamy up for some air!
yes this is about demand and not supply
Funny as always, hamy.
wish i knew more about this, but you were predicting this.
do you have crystal balls, tyler?
Dave Chapelle is looking to get a pair also
http://www.youtube.com/watch?v=7sn1RUjbL1g
i just had the funniest hour of my life†
TD's great, great, great-grandfather was pretty good at predicting shit as well, they called him Nostradamus!
luv your ID
Anyone remember the 2008 top in commodities? This is the beginning of the end. Crack up boom. Blow off top. Head fake. Take your pick. Global economy is going to puke in its mouth again as the pass through costs tip us back into depression.
That is what happened in the summer of 2008, and once the meltup started it was hard to see how it was going to end. "Never under $100 a barrel again."
Agreed, it's getting more obvious by the day that (hyper)inflationairy depression has been the right call all along. I see it as inevitable unless The Bernank stops monetizing treasuries, in which case the U.S. government will default. So...?
But, but...the Decepticrats say this is no time to cut spending because the Economic Recovery ™ is still fragile, while the Republicons are trying to cut the Federal Budget tree with a weed trimmer -- Bizarro world continues to spin on its axis...
Topping off my cars today (should have done it last week).. Fortunately, this is already priced into the market, so you can bet the DJI will close up at least 1% tomorrow.
It was already priced in on Friday, they knew today was a holiday. Up 2% tomorrow.
How much oil can a bankrupt US and the world buy again?
Wall Street Silver Gold Theft and World Economic Collapse
http://www.youtube.com/watch?v=WI8dfFN7H1w
"Flash crash"???
This jump in oil is very good news for equities. It means the recovery is accelerating, and demand in emerging markets gaining strength.
I know youre baiting Wanger2.0 but that was exactly the sales pitch the Goldmanites used in 2008. Price action makes headlines and all that - gotta fit a narrative to the squiggly lines!
Fast forward to "Oppps , the lines going down at 45 degrees , what does that mean"?
It means you will feel better if you rotate the graph 90 degrees counter-clockwise.
I sense the irony!
I am laughing out loudly...+1
LOL
Oh absolutely.
Fucking trolls
This actually seems pretty serious, someone should cut rates quick before this turns into a big problem
someone should cut rates quick before this turns into a big problem
+ ZIRP
Cut rates???
As I've previously said, most people here assume that inflation is a bad thing. Actually, it is quite the opposite. As Dr. Krugman Ph.D. showed, the more inflation, the better.
If the FED manages to create high inflation in the economy (>30%) the crisis will be definitely eradicated.
It is a perfect time to buy stocks.
does anyone really know what planet hairy weener banger actually hails from ?
If you read this blog regularly, you would know
Perhaps his own? A private planet CNBC. But maybe he is right. The future will come, no need to argue now about what it will be.
I keep putting forth the theory that Wanger is really an A.I. program...
The Fed will not cut cut rates. The market will go up tomorrow. Dont ask me for a link or proof.
oops. Can't cut rates any lower really. Fed will have to just start charging savers.
Nominal rates may (but maybe not) be zero-bound but the real interest rate is not, and that's what matters. 1% interest rate and 10% currency depreciation is a -9% real rate. No reason that can't be pushed down to -20% or -30%. Essentially, this is charging savers, which is certainly part of the plan. Quick! Spend your dollars before their value falls further!
So true!
Arrest the fall of your dollars purchasing power by trading dollars for PMs...
oops. Can't cut rates any lower really.
"Fed will have to just start charging savers."
Sorry to piss on your bonfire but the Fed has been doing that for quite some time now, although it might not be that obvious.
LMAO
Edit: I just got HFFastposted by somebody with a ZH colocation
My effin bank already does that. My last statement had a $15 "inactivity fee" because I haven't used the account in a while. Closing it out tomorrow.
WTF, are you shitting me?
So you are paying them for letting them use your money . . . .
"Aaah WTF, He's not using it so let's just relieve him of the burden of having money in the account"
LMAO
Negative interest rates...interesting. Start paying people to bank with them.
Wow. The end of fiat just got a step closer. Be surprised to see this on the msm news tonight.
Goldman Sacks said it would be over $200 in a short while back in 2008.
Time to go long on coal and short Obama !
Parabolic - and the price of a gallon in the US hits $4 before the summer. The real protests have yet to get underway in Europe and here, but they're coming.
or expect to see organized praying at pump in the bible belt.
Oh. So THAT's what the fuss was all about.
Bush's fault. Teabaggers too
I just paid $3.80 for 91 yesterday (California)... we're going to see $4 before spring at this rate.
http://www.orangecountygasprices.com/
Beechez!
$3.84 and rising north of L.A.
Rising gas prices can only mean one thing: higher NASCAR ticket prices. I think that is where this is going.
NASCAR switched to an ethanol blend this year, and a bunch of engines hand grenaded at Daytona. You've got to love it.
A real outbreak of revolts/protests in America is a frightening thought.
We're talking about hundreds of millions of totally misinformed/deceived public with guns and ammos. Some may go after elected officials but many will just turn on each other based on politics, race, religion, etc.
+1
Anger + guns != getting a clue
Homer Simpson wanted to buy a gun in one episode. When the clerk told him there was a 10-day waiting period, Homer whined, "But I'm angry now!"
This is part of what we're up against.
Saudi Arabia will be the tipping point. Once it falls, just picture the Brent/WTI chart. The black swans are circling so thickly already, and their wings have the sound of inevitability. . . .
Aren't only dealers open now to make or take trades, and so maybe its simply a sign of basically zero depth in the current market?
The price of Ag & Au caused an increase in demand for rocket fuel.
By the close tomorrow the es will be flat or green.
BTFD? Oh wait, there aren't any dips...
BTP? Buy the Plateau?
I believe the replacement is Buy The Fucking Rip, or BTFR!
Though I am open to new submissions.
TPTB will not let WTI go above $100.
What can they do to stop it? Events drive Brent higher and WTI is dragged along. US politicians don't control the world despite the conspiracy theorist rants.
Sure, just like WTI was "dragged along" as its premium to Brent evaporated and opened a $10+ differential.
RH, read up a little on the subject.
You have increased production coming online from the shale oil out of the Bakken's, some increased crude flowing down from Canada, plus you have some refinery constraints and max production capacity of the refineries and to top it all off you have some very old pipelines that cannot handle the increased viscosity of crude at full pressures, hence decreased flows on those pipelines... limiting the ability to get the increased production to the existing refineries that do have spare capacity.. all and all a grand clusterfuck, that even Machiavelli couldn't design... it will sort its way to a resolution.
Read this,
http://www.theoildrum.com/node/7519
How do you explain WTI at $91 this morning? I "read up" a lot, thank you very much. NB: Brent is now at $106.
Brent at $106 and WTI at $91 this morning. Wrong again, tough guy!
How would that happen? With forces already stretched to their limit and deployed in a dozen other theatres around the world. Problem with being the world's police man is it requires a world view that doesn't currently exist, right now it's a question of interests.
And what is being paid for is exactly what is being recieved. Nothing more, nothing less. Unless the US wishes to cut the salaries of all servicemen/women by around half their current salaries and scrap the current pensions following the folks that did serve. It just won't happen, you know how fast the coup in the US would be.
Faster than Egypt and every blue blood would be hung by their guts by the general population around five minute afterwards. While Jesus would find it impossible to stop throwing up all over himself because of the shit people do/did in his name. I can see the same level of betrayal of patriots to thier own government.
Black Swan ???
OMG like why is everyone so totally talking about a black swan? I have never seen one.
It was white, then it went diving in the gulf.
Meh, I'd Netflix it. Good scene with Natalie Portman and Mila Kunis, though.
Luckily you can eat oil. Of course it will be a little more expensive, but that dash of corexit makes it soooo tasty that nobody will be complaining. Ya want fries with that petroburger?
10 calories of fossil fuel energy for each calorie of food produced
you are eating oil
Heyyyyy everyone. This is Britney and I wanted to ask you for some help for my term paper.
I'm writing my paper on how the United States should use gold for it's currency. Could anyone help me?
TTYS. OMG i'm so not good at math! Why do i have to answer this pop quiz?
Well, you have to start with the human sacrifice of existing false gods, starting with the Church of the Fiat and it's Evangelizer-In-Chief.
OMG i'm like so sure. You look totally weird. Can anyone else help me. My paper is due on Friday.
Cut the crap Moon.
OMG you are like soooo rude and soooo creepy looking. Go Away!
I can help you, little Missy.
In the olden days, money used to be gold and silver. These are elements that have to be dug up from the Earth. Bankers couldn't make enough profits using a limited resource like gold and silver, so they invented "debt" as a form of money. Dollars are "IOU's" that are traded back and forth instead of gold and silver.
But now, it turns out that the Federal Reserve Bank is printing trillions of IOU's with nobody quite sure who owes what to whom. Maybe, the IOU's won't be paid back. This is known as risk or, specifically, "counter-party risk". It used to be assumed that dollars were backed by the full faith and credit of the United States, and that meant something, but now people aren't so sure.
To avoid any possibility of counter-party risk, some folks are thinking about resurrecting the silver and gold standard, because with gold and silver there's no risk.
I hope you get an A on your term paper, but you'll probably get an F.
Not bad, dept = slavery
- "to slavery, the greatest misunderstanding in the history of mankind."
- Cobra Verde
http://www.youtube.com/watch?v=4glquMRJLF8
Britney, young ones like you have a bleak future in this country, so, really, like, why even try to write that paper?!?
BTW, whatcha wearing?
Bernanke is that you? !!
this is in honor of dandy don
turn out the lights the partys over.....
This is not the bernank's fault.
Leave Bernanke Alone!
http://www.digitaljournal.com/img/4/3/4/4/i/4/2/2/o/LeaveBarackAlone.jpg
TPTB will allow gas prices to be high, but not too high. Too high will put a crimp in their lifestyles by adding some volatility they don't want. Remember, they can't let the natives get too restless...
Conspiracy theories are comforting. Its better to believe that there is some hidden cabal in charge than that we live in a chaotic and unpredictable world.
When I found out that we're living in the "Age of Kali", I found all the info I needed to explain the situation! In the Age of Kali, you DO as Kali commands!
Nope, no conspiracy here: https://www.fbo.gov/index?s=opportunity&mode=form&id=d88e9d660336be91552...
http://www.youtube.com/watch?v=yTbdnNgqfs8
Tin foil hat, no way, I'm wearing a lifter!: http://www.youtube.com/watch?v=bicra-36fBo&feature=related
brent or wti?
which will outperform the other?
i need some good advice here.
Maybe I should order heating oil tomorrow. Or, will it be too late?
you kidding...the jump will be priced in by 6 tonight and oil companies charge by the day of delivery. They won't pass up the opportunity to kneecap their customers.
Your too late. Ordered a fill up this morning for tomorrow- $3.18- but a few companies were already raising prices today. One company went up 7 cents by 10 am this morning.
I called family to urge them to also order fuel. Its 20F here!
I feel sorry for those who "never saw this coming".
Was mulling over a few crude shorts earlier , thank God I thought better of it . Insane moves today in Brent and WTI . Biggest daily ranges in well over a year and look at that spread compression . From $20 to $10 in about 2 days of trading !
Put a superman costume on Bennie Bucks and watch the rescue of the Market at all costs.
The Fed could lower rates to -1% or more. That will get cash moving.
The azz hats at the Fed have considered date-stamping money... So, if you don't spend it by the time the date-stamp expires it's no good.
How is that for a store of value???
If the price goes up just print more money bernanke style.
....... in other words, my adult son, who is unemployed, cannot afford to drive in the hopes of finding work & go on job interviews !! ............ STUPID ME ! ........... THERE AREN'T EVEN JOB INTERVIEWS TO DRIVE TO ANYMORE !! ........ so, good ol' Mom, with what resources she has left, is trying to help everyone .........
I CANNOT SAVE EVERYONE ! ..... i've given up stockpiling, have buried my silver for fear my family cashes it in for gasoline money .......... it's over !
WHO IS THE N.W.O. (new world order) ANYWAY !!! WHO THE HELL IS RESPONSIBLE FOR THIS MESS !
The powers that be are afflicted with Greed and Narcissism...a deadly combination...for us.
pseaking of Narcissim.. what is the over/under until Baky taps the SPR?
WHO THE HELL IS RESPONSIBLE FOR THIS MESS !
Watch this fun cartoon you will see.
http://www.silverbearcafe.com/private/02.11/hitmen.html
Here you go Lynny, You can listen to one of them http://www.youtube.com/watch?v=7Fw1RMKWypo
A little history
http://www.youtube.com/watch?v=LLzZjaMEGJA&feature=related
I might also add
http://www.democracynow.org/article.pl?sid=07/06/05/149254The creature was born of evil pigmen in the winter of 1910 on Jekyll Island.
http://www.youtube.com/watch?v=tGk5ioEXlIM
FED DELENDA EST!
CDS spreads on saudi arabia are widening.
Insane isn't it? Even the Saudis are in debt. If the Saudis can't pay their bills without borrowing money the whole system is quite obviously completely snookered.
One thing about this increase is that it will be affected by a destrution of production....some of the Islamists will destroy Satans oil fields as they see that as bad.....they will never come back on line nor would anyone in the Western world invest there again....I hope
It doesn't matter because it doesn't change core inflation and the fed doesn't care about headline inflation it's not a predictor of future expected inflation.
All the economical models show that the consumer will adjust to inflation and adjust his consumption choice. People are unemployed because they prefer leisure time than to work, if not, that would not be rational. I'm God, I'm the Ben Bernank
Heyyyy guys this is Britney. I have to go to the library to finish my homework so i will talk to ya'll later.
Bye-bye! :) TTYL.
OMG like i'm soooo totally embarrassed. My friend Ashley, well like her mom was going to pick us up so we could go to the library cuz Josh might be there and now she is not going to take us cuz she heard that Josh likes me and my mom will like totally have a cow if she finds out.
So now i'm back again.
is that you Chris Hansen?? this isn't a very target rich site for what you are looking for....at least i hope not
I'm so sure. This is Britney.
My Google search said to ask this website.
Either i have to finish this paper by Friday or my mom says that i can't go to cheer camp this summer. And Josh is going to be there so i might have to change my subject if you guys can't help a little.
Should i change topic to gulf oil?
http://news.yahoo.com/s/ap/us_sci_oil_spill_lingers
Tits or GTFO.
You should change your topic to how the oil industry has forced the sex industry's hand making plastic wangs and 20 pounds of pussy and ass.
http://www.bedroomjoys.com/fuck-me-silly-mega-pussy-and-ass.html
There's a lot of oil in those sex toys.
Otherwise...you could write a report on puppies and rainbows shooting out of unicorn asses while the economy recovers.
Ass, gas or grass...no one rides for free...
Last seen on motorcycle stickers in the 60s-70s.
Went long Fri Mar TZA calls...it's gonna do a 3-1 reverse split Weds which drops the outstanding from 38m to 13 million. Gotta love a thin float when everyone wants in and the train has left the station.
Awesome. Do post back tomorrow pm when the market ends green!
I was gonna add that. The market will probably be up a couple hundred points based on Bernanke borrowing another positive day from the future. It's apparent he's the only one buying stocks and he has an endless supply of our money that we get to pay back. Doesn't someone have to give him permission to do that?
I really might be screwed.
I have 200 shares of UGA in the low 30's, but I should have at least 500.
I was conviced oil was going to crash one more time as the CRB Index is way overextended.
Oh well, I guess I'll have to sell the truck and ride the bus!
LOL...
I am sure your gold/silver longs will balance the loss out.
a man of your wealth and fame taking the bus - never. you're a retired gentleman squire, remember. that's your made-up identity on the board.
btw: t boone pickens sends his regards. he was on the other side of your oil short.
more like http://www.travelphoto.net/photos/pictures/nepal/000084.jpg