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Desperate for Oil delivery next week

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Why is the market suddenly so desperate for the June contract. Currently trading at around 20 cents more than July contract. I would have expected the smart money to buy oil last month when it was apparently cheaper than free. Seems weird to me. If oil was going to go much higher than why aren't the forward months not much higher than spot price or is there an element of price manipulation. I would have expected traders to be  a lot more wary of the expiry of the June WTI next week. Instead if price action is to believed, seems like panic buying. What am I missing???? I don't usually trade oil, so if anyone can explain, I'd be grateful.

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Some think it has something to do with China manufacturing resuming work

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I’m with you, there’s still a massive surplus across the world , can’t quite believe the prices it rose to the last couple days. With the future expiry Monday evening a fall must come surely on Monday. Or maybe I’m missing something as well! Anyone else like to shed some light on this?!!

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4 hours ago, Cade said:

Why is the market suddenly so desperate for the June contract. Currently trading at around 20 cents more than July contract. I would have expected the smart money to buy oil last month when it was apparently cheaper than free. Seems weird to me. If oil was going to go much higher than why aren't the forward months not much higher than spot price or is there an element of price manipulation. I would have expected traders to be  a lot more wary of the expiry of the June WTI next week. Instead if price action is to believed, seems like panic buying. What am I missing???? I don't usually trade oil, so if anyone can explain, I'd be grateful.

 

32 minutes ago, NeilL said:

I’m with you, there’s still a massive surplus across the world , can’t quite believe the prices it rose to the last couple days. With the future expiry Monday evening a fall must come surely on Monday. Or maybe I’m missing something as well! Anyone else like to shed some light on this?!!

Big players not willing to get caught out again. Heavy buying for the May contracts around 240m barrels, as of yesterday for June contracts only 75m barrels but could still be some fireworks as now there is absolutely no storage.

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Am I right in saying the spot prices generally mirror the futures give and take a hundred points or so? So if the spot collapses or the futures it affects the other?

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16 minutes ago, NeilL said:

Am I right in saying the spot prices generally mirror the futures give and take a hundred points or so? So if the spot collapses or the futures it affects the other?

mirror would be the wrong word, they are related yes but are different markets with different focus, sometimes events will occur that will affect both similarly both other times they will react very differently. 

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Just a bear market bounce , a big one at that , the volume has been really low past few days just a continual drift higher with low volatility.., see short side resumption into next week after the rollover, if your short as I am just ride out the pain until then..

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Guest Confused

Anyone know why a position on the June contract has switched to July's by closing the June position automatically?

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I have been wondering the same. I closed (Friday) all my Oil positions (also avoids the weekend charges) as I feel that is to high for the demand.

I am thinking to go short and overexpose on "Sell", I wouldn't be surprised with a 3 to 5% drop on the price during next week. (or more)

But what do I know!!!???!!!

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18 hours ago, Ludwik Chodzko-Zajko IG said:

Here's the JUN-JUL spread - into positive territory for the first time since Feb.

 

sg2020051573222.gif.49c6cb2bb90e81b4e8f6a98a32682e93.gif

60 and 15 min

US Crude June July.png

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Guest yusuke

I believe the spot price of US crude oil will drop this week. 

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I was on the wrong side of this spread the last few days short 5 June -  Long 3 July and in and out of the spot trying to fight the trend.

Friday  17 May near close of business  try to reduce the   exposure by buying back 1 of the June shorts.....the system closed out all 5 contracts and rolled them over to July.

I am going to be so p***ed of if June price collapses.

and maybe a little grateful if the June price goes up faster than July.

 

Nevertheless the whole point of this exercise was to benefit from any last minute spread swing - put the spread on a few days early after reading all the documentation about complications surrounding expiry and rollovers.  It said nothing about partially closing a position.

Finally 3 of the short June once rolled over should have been set against the Long position as I have net-off  on.

So I  then got the privilege of paying the spread on an extra 6 contracts to close it out.

Worse than backing a horse at SP, it doesn't run and you have to pay the tax twice!

If you read this far thanks for hearing me out...tried to explain it to the Girlfiend...she said I am an idiot - I agreed - but reminded her that  I am a poorer idiot so she should get the drinks in.

MORAL

IF you DONT understand the SYSTEM works   DONT  try to BEAT it

 

 

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Why is the price still rallying when the contract expires tomorrow? I can't think of any justifiable reasoning personally. 

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