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WTI Crude Jumps After API Reports Unexpected Inventory Draw
After 2 weeks of inventory builds (and production drops), API reports an unexpected 3.1 million barrel inventory draw (with Cushing drawing down 1.5mm bbl). Crude surged back above $45 on the news...
and the reaction...
Charts: Bloomberg
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The inventory garbage is just noise. But the market manipulators need ammo for their daily bullshit.
The game is getting very old.
I say we play a new game. See if Goldman Sachs commodity traders can fly when dropped off tall buildings in New York.
Which will happen first, oil dropping to $33 a barrel or the Dow crashing through the 13,000 barrier? One thing now seems certain, the Dow is heading south to under 15,000. Prepare for false flag attacks to distract the news media as the U.S. economy craters.
Am I the only one that thinks the only real trade in the Oil Sector is making profits off of all these "unexpected" inventory reports. I guarandamntee you, they aren't unexpected to insiders...and the reports probably aren't even true.
Ironically, even if inventory stays perfectly flat...you can still making money off of the report coming in unexpectedly high one month, and unexpectedly low the next.
What a scam.
I made $1,800+ in the last 6 weeks, trading XLE hedged with weekly options. Buy XLE on a low day as a "buy-write" with sold call options. The natural decay in the weekly options will add value to your position every day. If XLE pops and you are net ahead intra-day, due a reverse buy-write and exit the trade. If you watch your net debit on the way in and net credit on the way out, you can pick up about $150 or so, every few days. In the meantime, XLE is trading near 52 week lows and it's a good ETF to hold. So... if the trade goes against you, just wait. Also, you can sell XLE weekly puts mid-day Thursday, for a 1-day trade. Pick the right strike and you'll take in about another $150 per week that way. Also, stay away from margin - only trade cash-covered puts and cash covered buy-writes.
US corp planning a war not conflict, unless it is losing, then it is a conflict.
This surely will end in the same way every other commodity manipulation will end. Even in sucky economic times the world needs oil, and lots of it. And, it's only a matter of time before all these Middle Eastern despots realize trying to out-supply US production to keep prices low will fail. Give it time. Oil for the next 75 years will be one of the few commodities we simply can't live without.
-Argenta
You weren't around from 1985 thru 2003 when oil dropped from $40 to $5 and did get back to $40 again until 20 years later
http://www.macrotrends.net/1369/crude-oil-price-history-chart
40 to 40 was 10 years
The Drop to sub $17 didn't last too long.
Meanwhile the US rig count keeps falling.
http://phx.corporate-ir.net/phoenix.zhtml?c=79687&p=irol-rigcountsoverview
Just because:
https://www.dmr.nd.gov/oilgas/stats/historicalbakkenoilstats.pdf
It is just for me or is oil being sold for less than its production cost in North Dakota?
It's not just you. That boom appears to have a lot of help and to have become invincible... at least for now.
They are down to around 68 rigs and I noticed that they now move 47% by rail and 46% by pipeline. That Sandpiper they were trying to get through Minnesota has been shut down for environmental review but I think they have a 12" going in McKenzie county but it will only be like 24 miles long.
I wonder what an inventory draw even is. Is it really an unexpected extraction of real product? Or just some paper movement? Most crude is already bought and allocated as it comes out of the ground. There are people putting the excess being pumped now, into storage, so they can profit on what the contracted prices are in the future. Current land based storage costs will allow extra profits. Soon, even floating tanker based storage can net extra profits, due to the future contract price being even higher than those storage costs.
So what real difference in price should about one percent, one time, extra draw make? And how is it an extra draw, when storage facilities are bulging. I would think the real winners are ones with oil that needs a home to mature in price for a while. Maybe the draw freed up some real space? I doubt it.
Probably some paper shuffle of some sort. Maybe someone went broke sitting on some expensive oil contracts. Now that oil is freed up. At a cheaper price. So the contracts are resold. On paper, a bunch of oil is reallocated? Drawn down? Is it reported when contracts go south, that oil is suddenly added to inventory? That would hurt prices. Best to only report when it is bought. Now or in the futures.
Just my guesses.
If you can't maintain the world reserve currency then you probably want to control the next best thing.. the oil stores themselves, choke points and infrastructure.
the BDI is not looking so great these days either....
http://investmenttools.com/futures/bdi_baltic_dry_index.htm