What option markets tell you… FT

by Jim Colburn • Tuesday, November 29, 2016

From Myron Scholes and Ash Alankar, Financial Times:

“So, the risk for investors has swung dramatically in recent weeks from protecting against the “bear” to the possibility of missing riding the “bull”. The options market is signalling that the distribution of possible future outcomes has changed considerably since the election, with the upside now more prominent.

Using options market prices to garner information about the distribution of future outcomes is similar to using crowdsourcing to gather information, such as the traffic app Waze. Market prices do convey important information about changing risks. For example, option prices suggest that Mexican assets are expected to deliver larger gains than losses, implying Trump won’t seek to impose headline-grabbing sanctions on the country. Although less pronounced, options market indicators are similar for China, Japan and emerging markets.”

Here is the link:


Let’s not get too crazy over what option markets are telling us or not telling us, but the article is excellent…



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Oil prices gyrate… Reuters

by Jim Colburn • Monday, November 28, 2016

From Reuters (http://www.reuters.com/article/us-global-oil-idUSKBN13N01J)

“On Sunday, Saudi Arabian Energy Minister Khalid al-Falih said that he believed the oil market would balance itself in 2017 even if producers did not intervene, and that keeping output at current levels could therefore be justified.”

I believe this… With no agreement, prices dump but recover.. With an agreement, maybe the trading range moves up to $45/$55… However, implied volatility for January options is up to 60%, with at the money straddles around $5, suggesting a big move on the other side of the meeting…



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OPEC is meeting this week…

by Jim Colburn • Monday, November 28, 2016

And the WSJ reports the money quote from Amrita Sen (http://www.wsj.com/articles/measuring-the-economic-spillover-of-opecs-oil-output-decisions-1480266002):

““At the end of the day, everyone is looking after their own interests and no one wants to lose market share,” said Amrita Sen, chief oil analyst at Energy Aspects.”

Here is a nice picture of what oversupply looks like:


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Persuasive Speech Issues

by Jim Colburn • Tuesday, November 22, 2016

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Renaissance’s Medallion Fund… Bloomberg

by Jim Colburn • Tuesday, November 22, 2016

Bloomberg does an excellent job describing a very successful fund here: https://www.bloomberg.com/news/articles/2016-11-21/how-renaissance-s-medallion-fund-became-finance-s-blackest-box

Do read the whole thing…

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Excellent al-Naimi interview… FT

by Jim Colburn • Monday, November 21, 2016

It’s ungated: https://www.ft.com/content/62d9eac6-a1dd-11e6-82c3-4351ce86813f

“The downward spiral in oil prices in the past two years has put particular focus on Naimi, who led the Opec cartel’s decision in November 2014 to adopt a no-limits approach to output in the face of growing competition from rival producers — a move he still defends. Naimi, who was oil minister until May this year, pointed to the kingdom’s attempts in the 1980s to cut output unilaterally for the benefit of others, deeming it an “unfortunate decision”. As Opec ministers gather again this month, they will seek to reverse the pump at will policy that has wreaked havoc on all oil economies. Naimi said he will “let history be the judge”.”


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Kashagan field starts commercial output… Reuters

by Jim Colburn • Monday, November 21, 2016

Here is the link: http://www.reuters.com/article/kazakhstan-kashagan-idUSL8N1DM1QP

“The field is set to ramp up output further during 2017 thanks to reinjection of sour gas into its reservoir, which will increase production to more than 150,000 bpd in 2017 and 230,000 bpd in 2018. Kazakhstan’s total production this year is forecast at about 1.6 million barrels per day.”

And this: “Discovered in 2000, the field was named after a 19th century Kazakh poet, Kashagan Kurzhimanuly. With its production difficulties, the field has lived up to its name which means “restive, uncontrollable.””



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Goldman’s Top Ten Market Themes for 2017… Bloomberg

by Jim Colburn • Monday, November 21, 2016

Yes, I am a sucker for lists, but these two of the ten are interesting:

“U.S. trade policy: concerns are likely overdone”

“Emerging markets risk: ‘Trump tantrum’ is temporary”

No mention of oil prices…





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Coal expected to surpass natural gas this winter, electricity generation…EIA

by Jim Colburn • Saturday, November 19, 2016

In Today In Energy, the EIA reports that, this winter, coal may surpass natural gas as the most common fuel to produce electricity… Low prices of natural gas relative to coal pushed gas ahead in April, 2015… Here is the EIA:

“Spot prices for natural gas have generally been rising in recent weeks. The cost of natural gas delivered to electric generators, which includes both spot market and contract purchases, has been increasing as well. The latest available data indicate that the generation cost of natural gas averaged $21.30/MWh in August, which was nearly identical to the cost of coal.
EIA’s November Short-Term Energy Outlook (STEO) projects that natural gas prices delivered to the power sector will continue rising. The STEO forecasts the average natural gas generation cost to reach a seasonal peak of nearly $31/MWh in February, which would be about 40% higher than the projected cost of coal for that month on a national average basis. Because coal costs vary widely across regions, relative fueling costs in particular markets may differ significantly from national averages.
The higher costs of natural gas relative to coal are likely to encourage the industry to use more coal to fuel electricity generation than in the recent past. Forecast cooler winter temperatures, especially in areas where coal is dominant, also contribute to higher projected coal use in power generation. If winter temperatures end up warmer than forecast, natural gas prices would likely stay low, which would reduce the incentive to use more coal-fired generation.”


Here the link:  http://www.eia.gov/todayinenergy/detail.php?id=28832

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Homeschool! Free training plans, designs, printables and much more

by Jim Colburn • Friday, November 18, 2016

An argumentative essay, by way of example, will not appear from the blue. Therefore variables that affect the procedure for writing a persuasive composition. The secret to this form of composition is getting personal. There’s not a thing worse than composing an essay utilizing the incorrect instance. Whatever the situation, remember these useful suggestions about just how to compose a fantastic capstone paper and you must just do good.

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