Options update…

by Jim Colburn • Friday, August 31, 2018

WTI traded over $70 yesterday:

Here is the CME’s snapshot of options trades ranked by change of open interest:

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Weak emerging-market currencies… WSJ

by Jim Colburn • Friday, August 31, 2018

Mike Bird and Saumya Vaishampayan, Wall Street Journal, write about the weakest emerging-market currencies here…  Here is the chart:

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Iran’s exports dropping faster than expected… WSJ

by Jim Colburn • Tuesday, August 28, 2018

Benoit Falcon, Wall Street Journal, suggests that Iran’s oil exports are dropping faster than expected…

“Iran oil shipments are declining at a faster-than-expected pace ahead of U.S. sanctions set to begin in November.

Iran expects crude exports to fall by a third in September, according to people familiar with purchasing plans, potentially posing an unforeseen supply risk to markets. Officials at the state-run National Iranian Oil Co. provisionally expect crude shipments to drop to about 1.5 million barrels a day next month, down from about 2.3 million barrels a day in June, say people familiar with the country’s ports loading program.

Many experts had expected oil shipments to decline by about 1 million barrels by year’s end. Now some of them say that fall may have already happened. Iran hasn’t yet announced its exports this month or its forecast for next month.”

Here is the link…  And, here is the crude chart going back 5 years (from barchart.com):

 

 

 

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What’s Driving 24-hour Trading of WTI Opions?… Jeff White

by Jim Colburn • Tuesday, August 28, 2018

Jeff White, CME, does an excellent job explaining 24-hour trading in WTI options, here…

“At a time when WTI has reemerged as the global oil benchmark, traders outside the U.S. are now able to access a deeper and more liquid WTI options market to execute hedging strategies in their own time zones.  This is the result of increased outreach to customers and market users outside the U.S., as well as other efforts by CME Group to build 24-hour liquidity in WTI options. Traders in the marketplace have responded to this and shifting oil fundamentals by increasing trading activity during Asian and European market hours.

Dampened at-the-money implied volatility in 2018 hasn’t stopped the volume growth of WTI options outside of U.S. hours.  During European trading, volume is up 10%. Even more impressive, volume during Asian trading up 25%.  Unmatched on-screen liquidity means traders can easily access the WTI options markets from any location at any time of day.”

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US natural gas production growth… EIA

by Jim Colburn • Tuesday, August 28, 2018

Here is the EIA’s “Today in Energy” on growth in natural gas production for the US:

”Gross production of natural gas in the United States has generally been increasing for more than a decade and in recent months has been more than 10% higher compared with the same months in 2017. This growth has been driven by production in the Appalachian Basin in the Northeast, the Permian Basin in western Texas and New Mexico, and the Haynesville Shale in Texas and Louisiana. These three regions collectively accounted for less than 15% of total U.S. natural gas production as recently as in 2007, but now they account for nearly 50% of total production.”

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8 people without a Nobel Prize… Grossman

by Jim Colburn • Tuesday, August 28, 2018

Adam Grossman lists eight people who have done much to educate individual investors here…. Good read, found this at Abnormal Returns

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The Crude Hub at Cushing, OK… RBN Energy

by Jim Colburn • Friday, August 24, 2018

RBN Energy begins a blog on Cushing’s changing role in oil markets… Here is a tasty sampling of the first posting:

”Today, 16 major or medium-sized pipelines flow into Cushing (the thick black lines in Figure 1 show the major ones) — their combined capacity is nearly 3.7 MMb/d — from a long list of production areas, including Western Canada, the Bakken, the Rockies, SCOOP/STACK and the Permian; many other smaller pipelines flow into and out of Cushing, and more barrels of local production can be delivered to the oil hub by truck. Within Cushing, there’s about 93 MMbbl of existing storage capacity — most of it in “Cushing South” (larger white rectangle) and some in “Cushing North” (smaller white rectangle) — in the form of large, circular steel tanks, most of which have floating roofs that prevent the accumulation of potentially dangerous vapors between the tank roof and the stored oil.“

“As for pipelines out of Cushing, there are 14 major or medium-sized systems, with a combined capacity of more than 3.1 MMb/d, headed for destinations as varied as refineries in Whiting, IN; Coffeyville, KS; and Memphis, TN; and refineries and export docks along the Texas Gulf Coast — the last of these mostly via either Enbridge and Enterprise Products Partners’ jointly owned Seaway pipelines to Freeport or TransCanada’s Marketlink pipeline to Nederland.”

 

 

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Trump/PredictIt/Daily Shot/WSJ

by Jim Colburn • Friday, August 24, 2018

We are interested in a variety of markets.. Here is PredictIt via the Wall Street Journal’s “Daily Shot”:

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US diesel demand highest since 2007… EIA

by Jim Colburn • Wednesday, August 22, 2018

From the EIA’s “This Week in Petroleum”:

”Despite record refinery runs and lower exports, distillate inventories in the United States have declined because consumption has outpaced the rate at which inventories have been replenished.”

 

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US natural gas pipeline exports to Mexico increase… EIA

by Jim Colburn • Wednesday, August 22, 2018

This, from the EIA’s Today in Energy:

“U.S. natural gas pipeline exports to Mexico have been increasing following expansions of cross-border pipeline capacity. These exports averaged 4.2 billion cubic feet per day (Bcf/d) in 2017 and 4.4 Bcf/d through the first five months of 2018. Based on data compiled by Genscape, natural gas exports to Mexico by pipeline exceeded 5 billion cubic feet per day (Bcf/d) for the first time in July 2018, after the commissioning of several key pipelines in Mexico. By the end of 2018, an additional four of six major pipelines identified as strategic in Mexico’s five-year natural gas infrastructure expansion plan are scheduled to begin commercial operations.”

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