Contango

Peak Oil 'Demand' & The Duelling Narratives Of Energy Inventories

Crude oil inventories in the U.S. have fallen 23.9 million barrels since the end of April, but, as Bloomberg notes, oil bulls counting on further declines are fighting history. Over the past five years refiners' crude demand has fallen an average of 1.2 million barrels a day from the peak in July to the low in October... "The rough part will be once refineries start going into maintenance,... we aren’t drawing down inventories very fast and the pressure on prices will increase."

Oil Surges After Gartman Exits Crude Long

"this aggressive “bidding” is sufficient to cause us to abandon our modest, one unit long positions in crude immediately upon receipt of this commentary. Being wrong is part of the business we are in; remaining wrong is anathema and the market is about to tell us that we are very, very wrong."

A Former NYMEX Trader Explains "The Mechanics Of Silver Manipulation"

What follows is how JPM manipulated the silver markets by selling the Silver contango during illiquid hours, then used their deep pockets to push settlements, then waited until margin calls made the large locals puke their positions. JPM in effect stretched the relationship between forward rates and futures spreads until they made no sense anymore. Not unlike a company trading at 50x earnings. It cannot last long. But it only has to last long enough until the guy with the position opposite you has to liquidate.

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Is Gold a Commodity?

Here’s a question that might have you pondering: Is gold a commodity?

More importantly, are we doing a disservice to the gold industry by calling gold a commodity? These may sound like silly questions, but hear me out

Morgan Stanley Notices The Strange Thing Taking Place Off The Singapore Coast

Last Friday we first reported on two surprising developments: one was a record accumulation of crude tankers just off the coast of Singapore in the Straits of Malacca, awaiting higher oil prices to offload their precious cargo; the second was that as a result of previously profitable contango trades now flattening and making storage no longer profitable, oil shippers are now forced to ask for bank loans to fund offshore storage costs. Over the weekend none other than Morgan Stanley noticed precisely these two developments.

 

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The Inflation Tipping-Point

The increasingly obvious trend reversal in inflation, amid softening growth, indicates the long predicted arrival of stagflation. While not unexpected, this is likely to propel the gold price higher.

Is Glencore Manipulating The Price Of Oil: Swiss Trader Holds Over 30% Of June Brent Supply

One particular energy trader - a name well-known to Zero Hedge readers - Glencore, has built up a massive inventory stake in the Brent market where it now holds an unprecedented 30% position in Brent, which it is holding for offshore storage in its tankers in hopes of pushing the price of Brent, and thus the entire energy complex higher, by limiting supply.

Will Algos Push Oil Back To $60? Morgan Stanley Begs You To "Forgive The Macros, They Know Not What They Do"

“Close your eyes and buy” seems to be the mantra for now. While fundamentals don’t justify a cyclical recovery in oil yet, the market continues to move higher. The primary driving force has been macro funds, index money and CTAs. Technicals and momentum have only added to it, and there is a sense from some of investors that they need to buy for fear of missing out. Similar to 2015, we see a confirmation bias where any bullish data point is embraced outages, weekly US production, etc) and bearish data points are dismissed or spun as a buying opportunity.

Pioneer Announces It Will Add More Rigs As Soon As Oil Hits $50

This is what Pioneer Natural Resources just said in its press release: "expecting to add five to ten horizontal drilling rigs when the price of oil recovers to approximately $50 per barrel and the outlook for oil supply/demand fundamentals is positive."