Oil options udate…

by Jim Colburn • Thursday, August 9, 2018

Volume in WTI options picked up significantly yesterday and volatility moved up about a point to settle at 24.4 (second month out)… Not surprising considering the price move:

More than 200,000 options traded, compared to a year to date average of 172,846… Recent activity was often under 100,000…  On a down day in price, more calls traded than puts, both increased in open interest… Here is a look at the most traded strikes:

The CME’s “Most Active Strikes” tool is here:  https://www.cmegroup.com/tools-information/quikstrike/options-most-active-strikes.html

 

+ read more

Supply/Demand balance… EIA

by Jim Colburn • Tuesday, August 7, 2018

The EIA’s Short Term Energy Outlook shows a market mostly in balance through 2019… We know that won’t happen…

   

 

 

+ read more

Brent, WTI time spreads take a different path… EIA

by Jim Colburn • Tuesday, August 7, 2018

This chart is from the EIA’s Short Term Energy Outlook, release today:

Strong refinery runs in the mid-continent and a major Canadian supply problem led to a sharp decline in Cushing stocks…

+ read more

Dr. Ed on yields…

by Jim Colburn • Tuesday, August 7, 2018

Dr. Ed Yardeni explains the tug of war in the bond market:

http://blog.yardeni.com/2018/08/tug-of-war-in-bond-market.html

Reminder:  check in on Dr. Ed’s blog more often…

 

+ read more

Supply Chain Adjustments…

by Jim Colburn • Tuesday, August 7, 2018

Clyde M. Russell, Reuters, has a nice piece, here, on the changing oil trade routes due to the China/US trade dispute and sanctions imposed on Iran:

“India has booked a total of 9.94 million barrels of crude, about 319,000 barrels per day (bpd), to arrive from the United States this month, according to vessel-tracking and port data compiled by Thomson Reuters Oil Research and Forecasts.

This would be almost triple the 119,000 bpd India imported from the United States in July, and well above the 190,000 bpd for November last year, the previous record for a month.”

The question for traders is how much oil will China buy from Iran?

+ read more

Power Worth Less Than Zero… Bloomberg

by Jim Colburn • Monday, August 6, 2018

Here is an excellent piece from Bloomberg on the spreading of negative power prices…

”With wind and solar farms sprouting up in more areas — and their power getting priority to feed into the grid in many places — the amount of electricity being generated is outstripping demand during certain hours of the day.

 The result: power prices are slipping to zero or even below more often in more jurisdictions. That’s adding to headaches for generators from NRG Energy Inc. in California to RWE AG in Germany and Origin Energy Ltd. in Australia. Once confined to a curiosity for a few hours over windy Christmas holidays, sub-zero cost of electricity is becoming a reality for hundreds of hours in many markets, upending the economics of the business in the process.”
+ read more

Vitol’s Ian Taylor… Financial Times

by Jim Colburn • Saturday, August 4, 2018

Interesting throughout…  https://www.ft.com/content/2dc35efc-89ea-11e8-bf9e-8771d5404543?accessToken=zwAAAWUGZJ3wkc8tw178ieoR6NO_nodx1UBFQw.MEUCIQCTCyw4DxUCi5L5nfxAT89e1woZhnWZYihSPv-kgvsj8AIge9PPe2ubD3eUoJE-x4xVLBJ566TyUSJHvblmNcxsDcs&sharetype=gift

 

+ read more

Cross-Asset Correlation… CME

by Jim Colburn • Saturday, August 4, 2018

Despite the often quoted analysts who explain a price change in oil as a reaction to a change in the dollar, the CME’s correlation tool here,

shows crude oil vs euro (6e) and Japanese yen (6j) close to zero:

+ read more

WTI options update….

by Jim Colburn • Saturday, August 4, 2018

Here are some volume data for WTI options traded in the CME…  July18 volume averaged 144,816 contracts per day, down 15.4% from July17… Year to date volume for 2018 is at 172,846 contracts, down 9.4% from last year… (https://www.cmegroup.com/daily_bulletin/monthly_volume/Web_ADV_Report_NYMEX_COMEX.pdf)

Here is a snapshot from the CME ranking active option strikes by most open interest… Dec18 calls dominate (but do note the $100calls in 2019 and 2020 on the leaderboard)… Sep $55 puts have made it to the top recently… Finally, note the very light volume trading on Friday (only around 76,000)…

https://www.cmegroup.com/tools-information/quikstrike/options-most-active-strikes.html 

 

+ read more

ERCOTexas surpassed all-time peak load in July… EIA

by Jim Colburn • Tuesday, July 31, 2018

Here is what happened to the price:

The link is here:  https://www.eia.gov/todayinenergy/detail.php?id=36775

 

 

+ read more
404