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Goldman Goes Long WTI
Goldman's David Greely is no Tom Stolper. In fact his recommendations have been correct more often than not. Which is why we believe that when the market learns that the Goldman commodities strategist just opened a long September WTI position at $107.55, it will merely provide that extra oomph to send WTI up, up and away. Or maybe not: this could be another one of the "fade Goldman" calls. Alas, with the real impact of the recent $2 trillion balance sheet expansion becomes truly felt we have a distinct feeling Goldman is quite right on this one. Evil, evil speculators.
From Goldman's David Greely:
Repositioning our trade recommendation as Brent crosses $120/bbl
Brent crude oil prices have rallied $11.92/bbl this month, crossing our 3-month target of $120/bbl and reaching their highest levels since last spring. While we continue to see an upward trajectory for crude oil prices, we believe that with Brent prices having crossed our 3-month price target it is an opportune time to reassess our trading recommendation and we believe that the better trading opportunity may currently lie in WTI futures for the contract months following the scheduled June reversal of the Seaway pipeline to flow crude oil from Cushing to the US Gulf Coast. Brent prices have risen above our 3-month target, but we expect them to continue to rise to $127.50/bbl over the next 12 months
We continue to expect Brent crude oil prices to rise further this year in order to restrain demand growth, keeping it in line with available supplies. Further, we see the risks to our forecasts as skewed to the upside as world oil inventories have not been building despite Saudi Arabia pumping at its highest levels in 30 years and Libyan supplies returning to the market. This suggests that the increased supplies have been absorbed by the market and leaves the world in the unprecedented situation in which OPEC spare capacity is at a trough rather than at a peak just as the world economic recovery is getting on a more solid footing.
Taking profit on our long July 2012 Brent trading recommendation with a potential gain of $13.19/bbl, and opening a long September 2012 WTI crude oil futures trading recommendation
The Seaway pipeline is scheduled to be reversed in June to flow up to 150 thousand b/d of crude oil from Cushing to the US Gulf Coast, increasing to 400 thousand b/d by early next year. With the Seaway flowing crude from Cushing to the US Gulf Coast, we expect WTI prices will be closely tied to Brent prices, with WTI likely trading at a $3-$5/bbl discount, reflecting the pipeline tariff economics. Consequently, we expect that WTI prices for the contract months following the reversal of the Seaway will move upward with Brent prices over the next 12 months. However, because these WTI contracts continue to trade at a substantial discount to Brent, we believe they have additional upside from the narrowing of the WTI-Brent spread that we expect following the reversal. For example, the September 2012 WTI-Brent spread is trading at $11.28/bbl, whereas on a 6-month horizon we expect the WTI-Brent spread will narrow to $5.00/bbl.
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EVIL, BITCHEZ!
Er, time to hike margins...Pelosi missed the boat...
$107.55? Really Goldman? It closed over $106 today ... way to stick your necks out ...
There is a difference between the types of oil and date of the contract, understand? His trade is already up $13.
all i can say is FUCK YOU GOLDMAN and let's have oil cross $150 and purge the PIIGS out so we may reset this global ponzi scam sooner rather than later.
sounds good to me.
well, if they've only just opened the contract they can't be responsible for it's past meteoric rise can they?
Perhaps the 'evil speculators' part was just refering to China...
which by itself has the ability to print enough money to send WTI to the moon...
in any currency...
I think the administration may have a hard time keeping crude in check with all the money printing and war mongering. I dunno, just a hunch.
The money printing is not the issue. The superspike of summer 2008 was before Quantitative Easing was in the lexicon.
Summer 2008 superspike also had no oil threatening war on the horizon.
But there are few things in the universe more sure that in an election year the Strategic Petroleum Reserve will be tapped again to flood supply and push price down if there is ANY sign of poll problems, errrrr, economic weakness.
Only one leetle problem. As US depletes its reserve, China is increasing its own. And US willhave to replenish at higher cost, drawing supply away from markets
Not to mention that releasing supply from the reserves does shit to affect the price. It's not like they flood the market forever with it, it's one little blip. Like a popcorn fart in a wind tunnel.
Speaking of superspikes, we are only about 10 months away from where the 70s crude market superspiked...
http://3.bp.blogspot.com/-r3K_TYfJo1c/TyRVKqe442I/AAAAAAAAByU/BPkI9KLWPR...
Genius at work!
$107.55 for something they could have bought for $96 for two weeks ago.
Guys you are looking at the wrong contract type. His trade is already profitable $13 on Brent Crude and he is suggesting swapping to WTI instead of holding Brent Crude.
i prefer buying Brent since WTI does not come from the middle east.
In terms of contract length i prefer selling the may future and going long the december future for an almost risk free premium of 5%. i,m an evil speculator who takes advantage of backwardation.
A SPR release is peanuts, barely a days worth of supply
Exactly. Doesn't affect the price in the least. Nada. Zilch. It's a bullshit PR move, nothing more. And a stupid one, at that.
no the super spike in 2008 happened after ben bernenke flooeded the system with liquidity and lowered interest rates hugely in an attempt to keep financial assets elevated. since the boys were short financials, and many people were also that liquidity found it's way into commodities. this induced a huge spike in oil, and a commdodty induced oil recession on top of the already edclining housing/ financial assets. the recession then turned into a crisis because of the oil spike when those maxed out on credit could no longer pay their bills. this is how the bernanke destroyed the system thinking he was helping.
Ron Paul is on the TeeVee. Where's the debate thread?
Serioulsy?!?!
$107.55...
Thats some serious rick right there baby... WTF!!?!?
It closed over $106 today. I'm guessing we will see $107.55 by Friday.
probably time to go opposite...
MISSED THE BOAT?!?!?!?! HA HA HA HA HA HA HA HA. That's a good one. Hell, I think Greely manages her money......
Florida Drivers Shelling Out Nearly $6 A Gallon
TAMPA (CBS Tampa) — Talk about pain at the pump! Some Florida drivers are spending nearly $6 a gallon to fill up their gas tanks.
http://tampa.cbslocal.com/2012/02/22/florida-drivers-shelling-out-nearly-6-a-gallon-at-some-gas-stations/
There are limits as to how much Bernanke can print and deficits matter.
Yet, the majority of market participants still believe Bernanke will announce QE3. (CPI 3%, Core CPI 2.3%, and $6 a gallon in Florida -- key state to win for Obama to get re-elected).
SPECULATORS! SPECULATORS! LUCIFER!
EVILLLLLLLL
Does the NDAA apply to oil "speculators" at Goldman?
No, they are the puppet masters, we are the slaves. Laws do not apply to them any longer.
Strike on Iran... C O N F I R M E D, 'cause after all we're doing "God's" work.
Ssssh. Don't tell Nancy Pelosi.
LOLMAN SACHS, BITCHEZ!
I hope y'all understand thoroughly what is between the lines here. He likes to keep his job so he can't say certain things explicitly, but it's pretty clear this dood actually understands things:
"We continue to expect Brent crude oil prices to rise further this year in order to restrain demand growth, keeping it in line with available supplies. Further, we see the risks to our forecasts as skewed to the upside as world oil inventories have not been building despite Saudi Arabia pumping at its highest levels in 30 years and Libyan supplies returning to the market. This suggests that the increased supplies have been absorbed by the market and leaves the world in the unprecedented situation in which OPEC spare capacity is at a trough rather than at a peak just as the world economic recovery is getting on a more solid footing."
That first bolded item is devastating. Welcome to reality, sportsfans. It's a reality where consumption does not equal demand. Demand likely always exceeds consumption.
He didn't address the reality that Saudi "production" of "oil" is shakey. A lot of that stuff can't sell to anyone because it's heavy and vanadium laced and would destroy any refinery that took it. It's a dubious barrel per day addition.
I think David Greely meant to say he's placed a bid on eBay for an Olive Oyl action figure for $107.55. Or maybe that's just the starting offer?
Well, I can't see Obama will let it happen before the election. For weeks, there are more supply than demand, I will be surprised to see Obama would let the oil hit 108 again, even with the escalation of Iran conflicts.
I think CME hike should be in the queue.
What makes you think Obama can do a damn thing about it? He takes orders, he doesn't give them. Jesus Christ on a pogo stick, wake the fuck up.
Oil is a hold here... the smart easy money has been made.
Check the archives.... I have said that when Brent hit ~$125 the wheels would come off shortly thereafter...
There is a day trade or two on the spike to come....
Be nimble, be quick...
maybe obama wants to sell more strategic reserves to their banker friends before the 100 dollar run up....
brent is burning up.
http://www.jinrongbaike.com
http://www.cnhedge.com
I am long WTF.
No shit, you can't go wrong with that trade.
Coming soon: Brent trade with no Brent crude
Royal Dutch Shell’s Brent oilfield, among the largest fields ever found in the UK North Sea, is set to be decommissioned in the near future, a company official said on Tuesday.
They must be tired of making money, seeing as how there is no way they are simply running out.
You draw it out. When it's empty, you Cap and Abandon.
It is always amusing to me that folks think you can never be empty. If you can never be empty, oil companies would not pay so many salaries to people who specialize in Cap and Abandon. You C&A a well carefully because if you don't and someone gets hurt at the site, you're sued.
When you're done, the land may look like what it looked like when you arrived, except for a 9 inch diameter tube extending down a few miles filed with concrete.
Look, we all know peak oil is a myth which will soon enough be corrected by fundamental market forces:
Prices will rise, lazy fat people will start to walk instead of drive to Taco Bell and gasoline prices must ipso facto fall.
Never mind that Brent just hit an all-time, record-busting high last night on the same night that Eurozone manufacturing and services flash PMIs came in at contracting levels!! And Europe is in the throws of a recession. And China and Japan shipping is moribund too. And China auto sales contracted last month, Makes perfect sense! In a biflationary world, that is, if you know what I mean
I would suggest buying a larger SUV since the tank tends to be larger, making it a forward gasoline speculation vehicle: it locks in Today's gasoline price as a hedge against further increases. You can always siphon the gasoline and sell it for a quick profit while you drive your bubble car with a solar panel on the roof for a while
I agree peak oil is a myth but the artificially created one is not. But besides oil prices are decided upon in some London office.
They have a big dart board with all kinda bogus reasons on it on which they throw a dart every day like ... pipeline burst in Timboektoo, unexpected this or that and so on and soforth.
Peak Oil Myth - Scam Busted by Noe van Hulst http://www.youtube.com/watch?v=6v3w4eyXVWELook we all know anything even remotely proactive from the USA from building more nuke plants to more domestic drilling will make $100bbl laughable.
Sure. Oil is everywhere
CE... see what happens when you forget the sarc flag???
yep
abiotic
linsay williams told me so...and ya know he hung out wit all dem 'portant folk as chaplan and all
No QE & progressive US policies regarding drilling:
oil<=$45/bbl.
(or in simple english your fear mongering peak oil has jack to do with jack in current prices)
But thanks for playing.
Juss how much more oil do ya'll think we squeeze outta Ol' Bessie?
Hell even the shoe-shine boy has had a poke at Ol' Bessie....
Peak oil theory has been around for 100yrs and has called for complete extinction at least 30times by now, the answer is obviously more than the fear mongerers are calling for as obviously history has proven that to be true time and time again.
Planet is finite. This guarantees limits.
BTW - Anyone you know die from cancer? I'm think that that too is a lie because up until they were diagnosed with it they hadn't had it; and based on your "logic," if something hasn't happened previously it won't happen.
BTW2 - Show us a reference to your "Peak oil theory has been around for 100yrs" comment. And, just what has called for complete extinction 30 times? You really ought to work on your sentence structure.
Umm... just where is all this oil hanging out??
You did see the US production curve in this post today?
Zero Hedge: Dangerous Ideas
And you do know that Global Net exports have declined since 2005?
And that despite "free money" from Bennie and His Inkjets that oil supply has not increased...
I mean to spend $2 Trillion dollars over the past 8 years only to keep supply flat...WTF?
Do you think that all the people that can benefit from selling *more* oil are that stupid that they can't find more of the stuff without poking $500 million holes in the bottom of the GofM??
Of course he believes that oil is infinite! When your life depends on something being a certain way you will defend to your death that that's so. Darwin will help matters along...
the same folks who have been wrong for 100years are suddenly right.
the theory has been around for 100yrs with mankind using beyond empty date at least 30times.
Amazing how all 30times they had yield charts and usage charts and were still wrong.
When you're a total fucking moron who's act is hardly new or novel,
have to ratchet up that fear mongering for fear of no one paying attention to the same imbeciles who have been wrong every time in the past.
you really should work on your gig and having all bases covered.
Darwin? Species has almost doubled it's lifespan in the last generation and half because the world is such a polluted, warmed wreck.
Well for one, it ain't the same folks....
Remember, the view always looks best from the peak....
And instead of ranting on the verge of incoherence, could you address the points I raised re: Net Exports and inability to raise supply in spite of low cost of funds...
Hey the bombing of Iran hasn't even started yet and here we are at $107. The irony is the sanctions and sabre rattling are having the opposite effect. We are strengthening nationalism in Iran, and increasing their oil profits. Not to mention China has now locked up Iran's reserves for themselves. Brilliant !! Meanwhile back at the farm, the green shoots are wilting and will soon turn dead brown. Oil is the ultimate economic brake. The only speculation we have is how far oil will go before it's high price triggers another credit collapse, and an even worse depression. These are the cycles of post peak collapse. It's the oil cycle, and will be with us from here on out along with various resource wars we end up fighting because we don't seem to know what else to do, or even why we are doing it.
"Peak oil theory has been around for 100yrs and has called for complete extinction at least 30times by now, the answer is obviously more than the fear mongerers are calling for as obviously history has proven that to be true time and time again."
You do realize that the boy who cried wolf was eventually correct and the wolf killed everyone?
Hey CiO...
In case you missed it... take a bow...
2186521
So we all agree. They have been wrong legions of times in the past so anything they are saying regarding supplies are most likely understated and probably dramatically. Can't be wrong 30times by not understating reserves 30times in a row. So the most accurate answer to the question of how much oil is left is much greater than the peak oil folks are saying.
Which hardly matters because it has fuck all to do with current oil prices.
You do realize that fear mongering and doomsday pandering are nothing new or novel?
Why do you do a little research on the nature and distribution of oil...
Be sure to check your Normalcy Bias at the door first though....
What you will find is that reserves, Q, are secondary, what matters is dQ/dt and depending on the nature of Q the dQ/dt can be very different....
GS
Great Satan
No need to wonder why GS goes long on WTI. Three-card Monte operation folded up the street side tables and left town ages ago. Have a look..
Goldman Sachs Announces 2007 Weights for the Goldman Sachs Commodity Index
Goldman Sachs raises 2011 price increase for WTI oil| Posted on November 23, 2011 at 11:44 am
The bank didn’t change its 2012 forecasts for Brent oil, the European benchmark traded on the London-based ICE Futures Europe. The oil will average $115, $120, $120 and $125 a barrel in next year’s quarters, according to the report. The revisions change the projected spread between the U.S. and European benchmarks and trading recommendations, Goldman said. The bank advises a short position in the March 2012 WTI- Brent spread and a long position in the December 2012 WTI-Brent spread
Who cut off the oil supply in Iran supply chain, Europe.
Commodity Price Risk Management-2008 Goldman Sachs vision.
Black gold, bitchez !
My personal view is that the recent "rise" in gasoline prices is yet another installment of "fool-the-suckers" and if you are long gasoline you will soon find yourself in a losing position. Let's face it - the gas prices were higher the summer before the big crash, and that was a manipulated situation too. But for some reason the Media has picked up this "gas prices rising" meme and is repeating it ad nauseaum, always the sign of a setup. I think fade this petro rally. The world is awash in oil. And I happen to agree with the concept of peak oil, just think that, like financial armageddon, it is a perrenial no show so it is a fool's game to time its arrival.
As near as I can tell, the Iranians have been engaged to feed this foolish rally in gas prices and must be working side by side with Goldman.
These are days when the CBs are completely in charge, and their evil is loose upon the world. I really think there has been a profound change in the din in the media, etc. lately and I sense many traps being set. The Rethuglicans floundering like a comedic troupe, the phony Greece deal, oil being set up as the next rally asset (god knows they need one to fleece us with), etc. Beware. And trade accordingly.
Just my $.02.
I happen to agree with your assessment here! Fake rally failed to gather suckers so they need another "thing" to make money, algo's playing ping pong with each other ain't makin them money!!!
Short USO GLD SLV Long TZA FAZ TVIX
This Time It's For R E A L after this is over R E A L P R I N T I N G will commence!
Churn, baby, churn.
G-Scrote is the Kiss of Death
At least it wasn't a hedge fund idea dinner
Hmmm $4.00 gas and a massive inventory of homes going on the market next month at firesale prices driving home values even lower.
Go Obamanomics!!!
When do we get GSAP cards??? Gasoline Supplemental Assistance Program
I think Obama could sign 100 million people up for that tomorrow. We need to get to 150% debt to GDP ASAP if we are going to get a Greece deal and screw China out of a trillion in US government debt.
To all ZH’ers, make sure you spent your unemployment check/EBT to buy that new taxpayer subsidized government union automobile, because gas is rising to $6-8/gallon. After we hook you into a green car contract concept, your new car will be reprocessed based on your inability to make payments. The government controls every aspect of your life. Those who don't purchase new vehicles will be heavily fined under emission laws that have been passed many years ago.
Don't get angry, just become smart.
Selling off bloated green automobile inventory is no different than Ninja home McMansion loan folks who purchased something they couldn’t afford.
Double, double toil and trouble- A dark Cave. In the middle, a Caldron boiling. Thunder | William Shakespear
What good is the repo going to do anyone? How many "assets" can TPTB stockpile? And, isn't is pretty much like channel stuffing, in that it's shit that sits around, wanted by no one?
All this stuff is about flipping prices up and down, shaking out the losers (on the loser side of the "bet"). At some point no one will be there to take the other side of the bet...
The one conundrum - Obummer will need a war to get reelected. Iran anyone? I think he'll gladly sacrifice the sheeple's well being to stay inpower. Sub $100 may be a thing of the past for some time to come.
Other than the fact that you sound like a Party Pussy I'm not seeing why you should have gotten a red arrow. GW Bush did EXACTLY what you're saying. So, the premise is perfectly valid.
As far as the "price" goes, it doesn't matter, really. TPTB (POTUS is just a tool) will send it to whatever side based on how the chips are being stacked: after all, That's the market! But... inflation, now that's another matter, and that doesn't require any military action to cause changes to oil prices.
Can hardly wait to see suckers falling in GS's trap! Have you all forgotten that GS is used to screwing its own clients let alone "strangers":))?!
A repeat of July 2008 is not likely this time around!!
The corporate mentality is always bread buttering self interest. Barge in, take over and loot. That's the way it's always been.
http://thedailyclimb.wordpress.com/
Watching Cramer. 2012 PST. 2/22...what a sorry cocksucker.
Peak production capacity? Sure. That's a psychological man made barrier. Peak extraction efficiency? For now, yes. Peak corruption of the oil "market" ? Hah!
Peak oil? Sure maybe some day - long after an asteroid has decimated the planet, or maybe as consequence of the Krugman alien invasion.
Caveat: It sure is easy to get a grant "investigating" peak oil and global warming...
"Peak production capacity? Sure. That's a psychological man made barrier. " Huh? You don't think that there are any physical barriers to pumping everything out all at once? Seems that the BP fiasco showed that production is a bit more than psychological.
"Peak oil? Sure maybe some day" "Peak oil" WHAT?
Try this one on: PEAK OIL EXPORTS - it's when countries value oil for internal use more than they value exchanging it for shit currencies.
energy is cheap, its the status quo that is becomming expencive
.
maintenance bitchez
www.cahrecords.com
Oil is on an uptrend. WTI has some room to run.
With the amount of energy it takes to put a US soldier on the ground being exponentially higher than in WW2 the mere threat of Us military action spikes oil prices
In May 2005 issue of The Atlantic Monthly, Robert Bryce stated that "The Third Army (of General Patton) had about 400,000 men and used about 400,000 gallons of gasoline a day." This makes one gallon per day per soldier.
According to my calculations (based on officially deployed troops number and oil consumption statistics) this amount went up to 9 gallons per day per deployed soldier in Vietnam War,[14] to nearly 10 gallons per day per deployed soldier in Operation Desert Shield/Storm (Gulf War),[15] and to 15 gallons per day per deployed soldier in January 2007.[16] I admit that this kind of calculation is not appropriate since troop levels vary in time.[17]
http://www.energybulletin.net/node/29925
http://karbuz.blogspot.com/2007/05/us-military-energy-consumption-facts....
If the US Military uses as much energy as 140 million Nigerians
Over 70 percent of the tonnage required to position today's U.S. Army into battle is fuel. The Air Force spends approximately 85 percent of its fuel budget to deliver, by airborne tankers, just 6 percent of its annual jet fuel usage."
Loan sharks knew that if they took the dollars printing machines under their control they could suffocate the world ...they could initially suffocate USA and after taking the USA from the Americans, they could move and suffocate the whole world and take the countries from their people.
FED printed cheap money and loansharking multiplied this money in an unnatural way within the American economy boarders and they discarded them abroad so that they did not threaten USA. USA became the first state in the world with artificial “breathing”...
It cannot be possible but just in the USA for only the last year, more than one million houses were seized. It cannot be impossible but the New World has returned to tents and shelters ..has returned to the ages of Columbus. It cannot be possible that we allow to a few loan sharks looting the toils and the assets of people...
http://eamb-ydrohoos.blogspot.com/2012/01/global-debt-crisis.html
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