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How To Trade Oil For HFT Idiots 101
While we previously exposed the 1430ET NYMEX Close Ramp trade, it appears a new algo-idiot trade has made an appearance. "Sell API Inventory data, Buy DOE Inventory Data"
On both of these occasions, the DOE build was much higher than expected BUT the spin, of course, was that it wasn't as bad as the API build the prior evening...
Stocks even gave up on it...
Don't forget - today's DOE data showed record production, record inventories, and the biggest inventory build in 5 weeks... but apart from that it all makes perfect sense.
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Oil has and likely always will be heavily manipulated. Price should be somewhere around $35. Complete bullshit and a good reason to never play in Wall Street's sandbox. You get better odds and chances of winning at casinos and race tracks.
Remember when oil traded above $100 for the first time ever in 08? Because that was also rigged and perpetrated by idiots.
As prices neared the historic level, the ConAgra trader said he’s “just going to be a madman,” according to a transcript of the conversation in the CFTC order.
“Another of CTG’s traders stated that CTG’s only reason for buying the contracts at $99.90 was to be the first to trade at the $100 milestone.”
A CTG trader later said in an e-mail that “some people collect art prints, we collect price prints,” according to the CFTC order.
http://www.bloomberg.com/news/articles/2010-08-16/conagra-trade-group-is...
How much longer before there is nowhere to put all that oil? Does price go to zero when there is literally no one who CAN buy it because there's nowhere to put it?
I heard mid-March, but not sure if that's true.
Make the "price" low enough and there will be plenty of places...
don't be so "dollar-centric"...
Not long
Trouble is - no one knows how much storage there actually is in toto - what with super tankers parked all over every where - including Puget Sound of all places. Anyway, come April - May we should find out when they have to start storing oil in empty milk containers.
API and DoE data is meaningless. These inventory numbers are no surprise to big money. Its all about making money.
Right. And, in the long run, it's more important what the cost of the marginal barrel is. That's where the debate should be.
"cost" priced in what? Have your fucking "debate", you are still ignoring the real problem.
Gee, in Econ 101, I learned all about the marginal cost v marginal revenue. As a micro phenomenon, I don't know if currency is such an important issue but, if so, that can be factored into the analysis. Whether it is, though, doesn't change that there is no consensus of what the marginal cost is. Rather, you have most just offering unsubstantiated guesses.
So the real problem is currency devaluation, yes?
I'm an energy economist. Don't get confused about the MC of production and prices on the WTI April futures. Different animals. MC of Shale runs 45 - 80 $ a barrel. Deep water US oil more like 80 +.
Stupid "analysis". You are much better off simply front-running the heating oil orders...
I never took the term "peak oil" to mean that our oil storage capacity had reached its peak. Shows what little I know...
We got a firm close above 51. Doors are opening for a run to 60.
Is that what the chicken bones are sayin?
A larger than expected number, but smaller than the last number is a decline in inventory.
Just like spending more than last year, but less than you said you would spend is a spending cut.
Makes perfect sense in Bizzaro world.
Uhhhh - the API & EIA are NET ADDS to STORAGE. EIA last week was 7.7, this week 8.4. WTI should go down - yes? No. So in 2 weeks we added 16 million barrels to storage.
http://www.eia.gov/petroleum/weekly/
CNBS said that oil didn't drop on the data becuase traders are finding a floor and hedge funds are loading up on oil for the inevitable rebound.
If true they aren't selling until oil hits $100 for a 100% profit off the trade.
Brent/wti spread widening. Putin and saudis winning the oil war.
The future is bright?
http://www.doomsteaddiner.net/blog/2015/02/25/false-signals/
I think the excess inventory is being snapped up for contago trades.
Once that is over, storage is full, there will probably be another preciptious drop in oil, testing the $44 lows-if it does that successfully we will have $30 WTI oil, at least temporarily
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That shitmouth Naimi started bullshitting like the psychopathic shill he is, telling the world exactly what he thinks it wants to hear.
What’s he doing is head-faking the world.
The Saudi’s will let the price sit here for a while, let the calm return to the other OPEC members, watch the marginal players in the US and such, to see how this shakes out, let the explosion slowly out, like a fart in church instead of a big ripper that everybody will bitch about--taking oil to $25/barrel—and then drop it again, to fix the next level of players.
But they don’t want to be the bad bastards in the news.
Watch the man behind the curtain. It’s the Saudis even though they are on the front of the stage.
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http://news.morningstar.com/all/dow-jones/us-markets/201502253860/oil-pr...
"Why do you want to rock the markets? The markets are calm... Demand is growing," Mr. Naimi told reporters on the sidelines of a conference in Saudi Arabia.
"Unless production drops to below 9 million barrels a day, we do not expect this oversupply issue to end," Daniel Ang, analyst at Phillip Futures, wrote in a note to clients.
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http://www.reuters.com/article/2015/02/25/us-markets-oil-idUSKBN0LT08620...
Brent crude oil futures surged 5 percent on Wednesday, after Saudi Arabia's oil minister said oil demand was growing and data showed Chinese factories were producing more than expected.
"Markets are calm now ... demand is growing," said Naimi,
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http://www.reuters.com/article/2015/02/24/us-markets-oil-idUSKBN0LR01E20...
"The fundamental backdrop is still bearish," said Carsten Fritsch, senior oil and commodities analyst at Commerzbank in Frankfurt, adding there was a "huge over-supply in the market."
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http://www.reuters.com/article/2015/02/25/us-oil-saudi-naimi-idUSKBN0LT0...
"I don't like to talk about oil because we want calmness," Naimi said when questioned by reporters.
"Why do you want to bring up the prices issue? Leave the prices alone."
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V-V
All I can say is that trader who bailed big time just after the EIA data was released no doubt is looking for a job this afternoon.
http://finviz.com/futures_charts.ashx?t=CL&p=m5
Note huge down trade ~ 10.
Yikes! Expected adds to storage was 4 million - EIA said 8.4. BUY!!!! Note that the API # at 8.9 was close this week to EIA.
And yeah - I picked up on that shit a couple of weeks ago. Watch the overnight and early morning tape on WTI. Play it by buying Pats and Calls on USO. Works for me. :-)
And BTW - Yellin is an asshole. The Fed said a while back they would "look through" the declining oil prices. In her lies to Congress she indicated the CPI would continue to be low due to LOWER OIL PRICES. BEECH!! Can't you even remember WTF youi said 2 months ago? Or are you pretending to be a sistah with Maxine Waters who was kissing yer ass today.
And speaking of Yellin. The Beech conveniently failed to address, and unfortunately no one asked, about her private meeting with Senate Democrats a few weeks ago.
Looking back at the tape, those doodz running up the price of WTI after the close, on Globex may wish they hadn't placed the trades.
No doubt a crummiy Baker Hughes number will tomorrow will also be a net positive. Was last week.
Hint on trading Oil. Use logic and figure out what would happen with a rational trader. Do the obvious? NO - the exact opposite.
Inside Futures;http://www.insidefutures.com/article/1387028/China%20Expanding.%20The%20...
http://www.insidefutures.com/article/1387306/The%20Trend%20Trader%20For%...
if you'd watched the oil market as i have for the last 10+ years you'd know that oil often rallies on good data and drops on poor data..... this is nothing new and nothing out of the ordinary..... it's buy the rumor, sell the news, in reverse...... everyone knew the stats would be good, they sold in advance..... when the news hit, they covered shorts..... rally was just lots of short covering, market comes off again... no big mystery here....