Commodity Research Group (CRG) is an independent research consultancy specializing in base and precious metals, as well energy products. The Group provides research and general price analysis for these markets, along with advice to companies seeking to construct hedging strategies.
In this podcast, Andrew Lebow and Jim Colburn discuss the latest economic trends and supply and demand factors affecting oil prices.
About the Experts
Andrew Lebow has been involved in the energy derivative area since 1980. He began his career with Shearson Lehman Brothers where he worked in the initial formulation and marketing of the NYMEX WTI crude contract in 1983 as well as the NYMEX gasoline contract in 1985.
Mr. Lebow has appeared before the State Government of Alaska as well as the State Department of Defense to discuss hedging techniques. Mr. Lebow is also well known as a market analyst and is quoted frequently in the financial press. He has appeared on television on CNBC, NBC, CNN, CBS, and PBS. Mr. Lebow holds a BA from Lafayette College and an MBA from the Kellogg School of Management at Northwestern University.
Jim Colburn is a futures and options professional with 30 years of wide ranging experience in commodity markets. For much of his career, at Man Financial (1989-2011) and Jefferies LLC (2012-2013), Mr. Colburn worked with major integrated oil companies, hedge funds, pension funds and other entities to develop market hedging and trading strategies.
He has conducted trading, hedging and risk management workshops in energy markets worldwide.
Mr. Colburn is a published author on options trading, hedging, market making and risk management. In 1986, while at the New York Mercantile Exchange, Mr. Colburn helped develop new markets in energy option contracts by educating the oil industry, banks, floor traders and brokers, worldwide.
Speaker 1: (00:04)
This is Jim Colburn of commodity research group. I’m here with Andy Lebow also of commodity research group and we’re here to talk about energy markets along with Ed Meir. Andy and I founded commodity research group which consults on various aspects of commodity markets. Check out our website, commodity research group.com where we post our blog and our podcasts. We’d also like to thank our good friend Doug Stetzer of EKT interactive oil and gas training for hosting this podcast. You can check out his daily newsletter, podcast and learning email@example.com this podcast should be construed as market commentary, merely observing economic, political and market conditions and is not intended to refer to any particular trading system or idea. We are not responsible for any trading decisions taken by anyone, not intended to listen in for nay information is not guaranteed to be accurate. This is not an offer to buy or sell any derivative. Today is October 5th.
Speaker 2: (01:17)
Andy, we’re still reeling from the chaos of disruption from the hurricanes. So, um, let’s start off with the weekly numbers that we just saw from the Eia and there was an eye popping number I’d like you to talk about. And that’s a crude oil exports.
Speaker 3: (01:35)
Yeah. Crude oil exports were enormous last week at almost 2 million barrels a day. I have to tell you, I didn’t even think the capacity, our crude export capacity is, is 2 million barrels a day. So that, that was a huge number. Um, and again, I think we’re still looking at these numbers. It’s still a lot of noise in these numbers from uh, from Harvey. I think it’s still going to be another week or two before some of these anomalies and the numbers start settling down. But, uh, nevertheless that’s, that’s a big number and uh, it, it does make sense. One is catch up from, uh, the, the previous two or three weeks before when, uh, we couldn’t really export to is the fact that a, it’s a very basic fact. US domestic crude is cheap and a demand for, for it naturally has got to increase. I mean, last, last month we saw the Brenty eyes get down to a seven, the almost $7 on their t I on the brand. So there’s a naturally going to be demand for the cheaper sweet crude. Um, and we’re, we’re seeing that in the numbers.
Speaker 2: (02:53)
So is it, is that stuff going on all around the world or is it mainly to certain locations?
Speaker 3: (03:00)
I think it’s going on everywhere. We saw some cargos loaded to go to, uh, India, uh, obviously Canada that keeps the, keeps demanding our crew, but that’s via pipe. Um, South America certainly is, is, is, is taking some of those, taking some of those barrels. But um, yeah, I think that’s global exports. When does the government go back and revise these numbers? So it’s possible that number is maybe a little high. Yeah, I’m sure the government will, that weekly is definitely high. Um, yeah, the government revises them in the monthly reports. Uh, but that comes out two months from now. So at the end of December, it’ll start revising the September or the end of November. We should see these, the September numbers being being revised. Uh, in fact, I think the whole slew of these numbers are going to be revised once we have a better handle on what actually happened.
Speaker 2: (04:05)
Now some of the analysts were looking for huge builds in crude oil over was a month and um, we’re not quite seeing them. Do you think some of these, uh, uh, in addition to the, you know, we’re seeing US oil exports, I popping, but, um, it’s a possible some of the ships that were coming in during the hurricane were diverted and, and uh, just didn’t make it.
Speaker 3: (04:29)
Yeah, definitely. It has to be or they just haven’t, they haven’t been counted yet. There was one, uh, one investment bank was looking for 40 million barrel crude, um, build during the months of September, October. And, uh, I think as soon as that number came out, both of us, Jim, we were both like this, this way we’re building 40 million barrels. If that was the case, uh, you know, I think the market would have been, well under, you would, would’ve been under some severe pressure. And we’ve seen this market hang it, right. It’s hanging in. So you know that that builds has gone by the by the wayside. And, uh, I think your point is right. I mean we’re not, we’re not seeing those barrels either being counted or they were diverted a, which is certainly possible.
Speaker 2: (05:19)
So one might expect the um, Brent Ti arb too narrow.
Speaker 3: (05:27)
That seems logical as the both of us though sometimes the most logical trades don’t work out that, uh, the Brenty I should just should narrow because the man for us crudes are going to increase, uh, brand accrued. Um, you know, I, I personally think Brent may have had had its run. We’re seeing the backwardation come out of the brand market and one the, one of the um, physical crude grades forties has gone from like a dollar backward dated over Brent to flat and in just the last week or so, so that, that really, you know, backwardation really came out of that, which is bearish, um, is recapturing some of it’s South American markets in the products, a product exports, which have begun to increase. And those, those have been taken for a few weeks by European refiners. So what we’re seeing is European margins are coming off a, which is weakening the Brent market now today, paradoxically the Brent Tai is not narrowing. It’s widening. Not sure why, but that’s just the one day thing.
Speaker 2: (06:45)
Well, we had that even though there was a draw in crude stocks this week, we saw a building Cushing, Oklahoma, which obviously is a delivery point for the futures contract of a 1.6 million barrels in the net. I’m not sure why that’s happening, but, um,
Speaker 3: (07:00)
yeah, me neither. That’s, I’m not quite sure why that’s happening.
Speaker 2: (07:04)
You know, Wtu I might still be looked at as like a, a stranded stranded asset right now relative to, to Brent. I don’t know.
Speaker 3: (07:11)
Yeah, that could be, or it could be just a couple of day phenomenon here in the, and I think the trend is going to be for the Tei to gain on breadth over the next, over the next few weeks.
Speaker 2: (07:24)
You know, it’s, uh, it’s interesting at post, uh, hurricanes, um, really, uh, you know, focusing in on the weekly numbers when we know that, um, they’ve always had noise attached to them and yet we’re trying to make a lot out of a one week number. So I have to be careful. Remember, not only are they one week numbers, but they’re, you know, there’s been major disruptions and chaos in the energy flows. So, um, uh, you, you mentioned, um, product exports, uh, that also looked like an eye popping number in the weekly. Is it 5 million barrels exports?
Speaker 3: (08:02)
Well, product x works picked up again after, uh, after the hurricane. Uh, demand from Latin America has been really strong, particularly in Mexico. Um, Brazil, uh, has, has also picked up on, uh, it’s, uh, it’s demand. And as I said previously, the European refiners made that up, um, during the two or three week period around or the week before, you know, a couple of weeks period around, uh, Harvey. But we’re now recapturing those, those markets and the demand should export to me and probably should be picking up here. Um, Mexico, um, they lost as the Salinas refinery has been up and down for the seemingly this whole year. It’s, uh, it’s about to restart. So, or already has restarted. Um, so that, that may tamp tamped down a little bit. Uh, Mexican demand. I think what’s interesting is that the numbers, um, you know, I think, I think crude runs the, the IAA has a 16. I think they’re actually higher than that. Um, as always happens, it does take refiners longer to, uh, to restart. Uh, you know, I, I thought this week we’d be at 16, three 16 for, uh, on our way to, to 16, seven at some point during, uh, during the month of October.
Speaker 2: (09:27)
So, um, then 16 million number, uh, typically we, we’re going into turnaround season where they, uh, do scheduled maintenance or are they down more because of that maybe? Or what are you hearing?
Speaker 3: (09:45)
Well, I think on turnaround, so a lot of them are going to be postponed because us margins are still, um, still very healthy. And a refiners just lost Gulf coast refiners just lost, um, a lot of September. So I, I think that they are multiple, many of them have postponed their turnaround. So we’ll probably see runs, uh, stay pretty strong during, uh, during the month of October, you know, as the, as they recover a stay strong during October and into November and December, which again should be bullish for Tei, you know, should be supportive for Tei. And, um, you know, the, another argument for the Tei Brent to uh, to narrow in. Uh, we also would have, what will be interesting and, um, is whether we start rebuilding distillate stocks here. Uh, we’ve seen a big draw in both in distillates here these last few weeks and we’re low. I mean going into the season we’re low, we’re in 135 million barrels, which is 25 below last year and six below the, the four year average. So, um, this load is definitely something to watch. Um, the trading community has been watching it of course, because the look at the commitment, the commitment of traders funds it really long. Oh Man. Record long for a, I think it’s record long for this list. Um, so, you know, they’ve already loaded up. And I think some of the selloff we saw earlier this week was probably some of the length, uh, getting out. But fundamentally, diesel looks great. I mean it looks,
Speaker 2: (11:31)
so you said you’re thinking any, any a sell off in this lineage is going be short lived.
Speaker 3: (11:36)
I really do. Um, you know, we’ll see what the yield spring on, uh, on dislet, but demand continues to be really strong and I think that global demand and that’s, that’s all the macro
Speaker 2: (11:49)
right. Did the, uh, we, we look at the macro GDP forecasts from three and a half percent for this year and maybe a little tick more for next year. And, uh, and I think, I think there’s been some articles about how all economies are growing at the same time. And you know, that doesn’t always, it doesn’t always happen. And so that, you know, that maybe that’s what distillate strength is coming from.
Speaker 3: (12:16)
Oh, I think it definitely is a gasoline less so, um, global Glick, gasoline demand is not growing quite as strong as, uh, as diesel. But it, it’s still on, on the growth mode here in the u s um, demand is probably going to be, uh, reduced because of Harvey and Irma. Um, you know, I, I’ve marked it down like a hundred thousand barrels a day. I think that’s about right for the fourth quarter and into the, into the first quarter on the loss of, uh, you know, the loss of vehicles that may be slightly less, slightly more than that. Uh, but I think that, you know, the big thing on both the hurricanes is that thankfully a lot of the, the destruction, it’s not, I don’t think it’s a long last thing. It’s not going to be a long lasting event. We didn’t see any permanent damage. Right. So,
Speaker 2: (13:18)
um, just for the gasoline story, you know, earlier, or maybe it was last year, earlier this year, um, the, this stuff being talked about was how people have changed their lifestyle. So, um, if you, if you looked at the per capita, uh, driving miles, it’s, it’s down total. Total miles driven is up. And now, now that you know, the, the story is all these electrical, electric vehicles, evs that are, uh, being mandated by some, I think China and France and maybe a few other places are saying we want to, we want to increase the amount of electric vehicles. So we, you haven’t, from talking to you, you haven’t plugged that into your gasoline demand estimates have you dot. No, no,
Speaker 3: (14:10)
even close to, because it isn’t even close. Right? It’s still small. If you look at the numbers, you know, right now there are 1.2 billion vehicles on the road, uh, globally and there’s only 2 million electric vehicles on the road. So, you know, even though I think there’s a lot of hype about where the electrical, where electric vehicles will be going and no doubt they’re going to grow over the next 10 years, we see that, as you said, Jim and some of the work government policy is going and where the market seems to be going. But I think to really have an impact on demand, it’s going to take, you know, we still have, a few years ago I saw a, there was a, I think it was Barclays or one of the investment banks, did a study on, on demand and how electric vehicles are going to take up something like three and a half million barrels a day of demand and the intermediate term and 9 million over the longer term. And then maybe maybe over the longer term. I don’t even see that number in the intermediate term cause there’s still a lot of uh, elect a lot of, um, gasoline powered vehicles on the road and it’s going to take a long time tire those vehicles
Speaker 2: (15:31)
to penetrate. Yeah. Um, okay. Well let’s back up just a minute. The Eia numbers that came out, uh, we’re, you know, a few weeks ago, I want to bring them up cause they, they bumped up demands. I’m sorry. I, yeah, you’re right. Sorry. I, that’s the International Energy Agency Agency and uh, there, I think they were up at 1.6 for this year now and that seems to get a lot of, uh, I mean, oftentimes their numbers are fadable I mean it, and I say that because, sorry, writing about already in the market. Right, right. And so, um, but this time it seemed like the, the funds jumped the funds that were still on the sidelines jumped in Dubai. I mean does that,
Speaker 3: (16:26)
but yeah, I think that’s right. Uh, you know, we certainly seen that in the, in the brand market. The funds are really, you know, that they’ve really pile then since, uh, that I ea report, the gross length is up probably, you know, almost a hundred thousand barrels and Brant and t I length is up less of maybe 40 or 50. But Brandt, you look at the commitment of traders and it’s like eight and a half to one long, which is getting up to be way too long. Tis only 3.3 to one, which again would argue for the narrowing of that spread. Probably go the other way. But that makes sense of yours. Yeah.
Speaker 2: (17:08)
If you’re bullish oil, you kind of want to buy Brent and if you’re bearish oil, you want to sell Wti would frighten would think still. Right.
Speaker 3: (17:16)
And uh, you know, I th I think the macro, um, and, and these IAEA reports, yeah, it did spark some, a speculative buying along with a lot of other, a lot of other factors. Um, I think it was one of the factors in the frat rally. Um, but maybe that also disruption of flows was, it was, uh, another factor, um, as was less supply, uh, on the BFO he market.
Speaker 2: (17:47)
Right. Um, can just talk about China for a second that it looks like their, their demand was a very strong and, um, you know, it looks like China of the old days where they’re, where they’re really cranking up demand and when you include maybe a, you know, supply being down, um, they’re, they’re really up at once again, a bullish factor for this market.
Speaker 3: (18:13)
Yeah. Uh, the, there, they’re a crew production continues to decline. A demand in the first half was, was rip roaring. Um, I think maybe half a million barrels a day high or maybe maybe a little bit more, cause at least according to the IEA, they may slow now, uh, as we headed to the, as we headed to the fourth quarter, although I do have my suspicions that they may have ramped up, uh, Brent related crude purchases, a little concerned about what was happening over here and, uh, with, uh, with Harvey having an impact on a TCI x production, uh, and, uh, an exports. Uh, but China’s had a really, they’ve had a really strong demand year. Uh, again, it’s probably going to, it’s going to soften a little in the, in the fourth quarter. But like you said, Jim, it’s, it’s not quite the old days when they were going up like a million barrels a day, you know, every year we were gone, what’s going on? Right. It was like 2004, 2005. Right. Like, the water was gone. It was rally every day. And we didn’t quite, you know, along with many other people in the market, we didn’t quite see what a seismic change was going on.
Speaker 2: (19:25)
Right, exactly. Um, so let’s move over to OPEC supply for the fourth quarter. Um, I think you wrote in the monthly that there’s a potential for some losses, but they’ll say Nigeria and maybe a rack, but I’m also, it’s the end of the burn season and Saudi Arabia. So what’s your outlook for OPEC?
Speaker 3: (19:50)
I think that, uh, OPEC output is, it was 32, eight more or less in, uh, September. I think that number’s probably going to be pretty good for the, uh, for the fourth quarter, right around 32, eight. We probably will lose some from Nigeria. Uh, they’ve had some infrastructure issues and Olivia too, it said some geopolitical issues, so we may lose some from that. They are, I think Saudi is going to increase a little bit. Um, and uh, you know, the big story is Iraq. Uh, whether or not the Turks have threatened to shut off the, um, pipeline, the Kurdish pipeline, um, through Turkey, out a Turkish pipeline, but through, through which about 600,000 barrels a day of, um, of crude flows from the north, from Kurdistan. And, um, you know, should we lose that? That’s a, that’s a pretty significant factor. But, um, right now it’s open.
Speaker 3: (20:52)
I personally think it’s going to remain open, but you know that that’s obviously a big factor that the markets watching. Uh, but as if let’s say, Oh, pick those produce 30 to eight, I think that’s right around balance. The call for OPEC crude looks like for the fourth quarter, uh, looks like it’s going to be right there. You know, it looks like it’s going to be 30 to eight 30 to nine. You know, so it looks, it looks as though the market’s going to be pretty, pretty balanced then in the fourth quarter. Um, now that, having said that, and again, if we remove half a million barrels a day, it’s imbalanced by a lot. Right. Um, but you know, having said that, we are, we are drawing, we are rebalancing. I mean, we are drawing stocks, uh, through the first three quarters of this year. We’re, we’re, we’re getting there. We’re not there yet. We’re getting there. We’ve, we may never get there slowly, but surely we may never get to where Oh, pick wants, which is right around the five year average. I don’t, I don’t think that’s going to happen. But if you look at day supply, which I’m sure you’re about to talk about, it’s just not to bring that up. Yeah, go ahead.
Speaker 2: (22:06)
If you have a certain, you have a stock levels from five years ago and demand is increased for five years, all of a sudden it’s a tighter
Speaker 3: (22:14)
to tighter market. Right, right. Cause yeah, exactly. Yeah.
Speaker 2: (22:19)
I mean these are, these would be, you know, balancing stock levels that you want to keep. Not, not, not that I’m, you know, like Kenji contingency, a supplies, not necessarily stuff that you’ve taken on because, uh, there was an oversupply in the market in the marketplace. So before you get into price, price forecast, I just want to tell you, um, you’re balanced and market, uh, uh, idea seems to be in the option market. And I mean, we have a volatility number of 24 complete four for November and 25.94 December options. And you know, they, they, they expire the month previous. So September a Novi is a, it goes off stuff, 17th of October, December, it goes off 15th of November. And that, you know, if you think the longterm average is around 33%, you know, this, this market says exactly that we’re in this balance and, uh, you know, trading range market and obviously the, you know, it was, uh, it was saying that in 2014, it got that down to record lows before we have the big, uh, dumped in price and a big spike involvement for now looking, if you look at this implied volatility number, it’s saying exactly what you, um, what you laid out here.
Speaker 2: (23:33)
That despite all the crazy stuff that’s going in, uh, around the world, the oil market is expected to be balanced based on what we see in the marketplace
Speaker 3: (23:43)
in the fourth quarter. If you look at the first quarter, uh, that’s a different story because then the call on OPEC crude is 30 to one. Um, and the first half, it looks like it’s 32, three. If you take both, both have so that they produce 30 to eight, 30 to nine, that will be, we’re not going to be balanced, so will be slightly imbalanced then this is why, you know, there, there’s a lot of negotiations going on right now, uh, re in beginning in Moscow with, uh, making sure the Russians, uh, extend this agreement. You know, the, I think they’re hoping till the end of the year, but the Russia is not, I don’t think they’re looking for the end of the year, but, um, you know, it’s important that that, uh, OPEC remains committed to their, uh, to their production deal.
Speaker 2: (24:36)
So, um, since we brought up options, I have to mention the, uh, the, the option with the most open interest out there is, continues to be the December 60 call with 61,500 open interest. And, um, it’s worth probably about, I dunno, 5 cents right now and they’re all year long. He’s, you said, first of all, you said anything can happen, however your your guests was, we would, wouldn’t get to 60. So that’s a, would you still feel that way? And it sounds like, it sounds like your feet, you can roll it. You could, it sounds like you could roll your, uh, your, your idea of that not getting there
Speaker 3: (25:18)
into the first quarter as well. I think that at least that, you know, maybe if we lose the, this, these Iraqi barrels, uh, you know, the Kurdish barrels. Yeah,
Speaker 2: (25:29)
right. Certainly not saying you should sell it. I just have watching commodities and night my adult life. Like I just have a hard time selling out of the money options. Um, it’s, it’s, uh, you know, you, you might make money for a lot of months and then all of a sudden, boom, you’re dead. Where’s the trading? While there’s the Ds, the D [inaudible] is, uh, um, the other day, two days ago had settled at 6 cents. So I assume it’s a little less than that now. So yeah, you could start, obviously you don’t want to sell anything. You don’t want us to it, it just gives us what’s the point that’s success. But even even going out to sit, you know, if you go out six months and sell it and you get, I don’t know what the price is, but you may get a little bit more, but you really, when you do that kind of stuff, you have to realize that that even though it’s got some positive value, that probability that it’s not going to make it. It’s already in the market with this a 24% vile. So, so you’re writing. So you have to have a very, very strong opinion. And you know, like I said in a long one, those, those things don’t always work out that well. And then I’m not even going to mention the site. Well, maybe a of the psychological thing where you sell a 60 call, you feel like you don’t have to do any, uh, risk management until you get to a 59 99.
Speaker 2: (27:00)
That’s like a, you know, waiting for the year in, uh, the plane’s going down and you wait till you’re six feet off the ground and you jumped and it just doesn’t work out.
Speaker 3: (27:10)
Thus it doesn’t work out. Well. Now you were, you were also talking about the, um, the flat calls.
Speaker 2: (27:17)
Yeah. That the CSO is now over the year. You know, even going back to last year, uh, the flat call was, uh, was very, it was active. So, so obviously we peeled off a lot of months. These are, these are the, uh, the spread options, the calendar spread option. So for no looking at November flat calls, there’s almost 44,000 open interest. That’s a big number. And for the December flat call a is 50,000. So if I bought that December flat car, um, it gives me the right to buy decent cell, Jan. Okay. So, so it’s a backwardation play. If you buy it, you think you’re going into backwardation. If you sell it, you’re thinking you’re, you’re going to remain in contango. Right. So those, so, so a lot of bets were made over over the years, especially, you know, earlier in the year that we are, we would be backward dated by now and it’s just, uh, you know, it was, like you said, it’s a, the balance is coming is it’s just slow or slow in happening. So a lot slower than we thought. And, um, at least right now we don’t, we see some bets being made for 2018 but, um, the CSL market is kind of a quiet relative to last year.
Speaker 3: (28:32)
Yeah. I thought that things aren’t, that they’re not that obvious. Well, they never obvious, but, um, you know, in terms of structure, the, that it’s just not that obvious. I mean we’re, we’re beginning to see there was a big rally in the, in, uh, the Ds, Fred Dcis and the ds eight, these nines. Uh, but they’re beginning to give way now, uh, on the downside as people start looking ahead to the first and second quarters, uh, you know, and they see that imbalances. So those back once, you know, that structure is beginning to soften. And of course, the brand structure, as I mentioned, uh, has, has come off, has come off as well and in the front. So, um, and then you’ve got the, all right, well if we do lose, he’s half million barrel a day. Um, bear, you know, if we lose that then this, then it’s a whole different, you know, the than the supply demand changes pretty radically if it’s down for a long time.
Speaker 2: (29:32)
So, um, do you want to give some numbers and crude oil? Would what you think say month forward price range or you know, I think it’s, we’ve been saying Jim this, it doesn’t look, it looks pretty steady, you know, 45, 55 like, yeah, I think that’s still it. I mean you maybe, maybe you want to tighten it up to
Speaker 3: (29:54)
48 53 or you know, but I think 45 55 is that still,
Speaker 2: (30:01)
that’s what it looks like. And if I’m, say going out to first quarter of next year, if it broke out of that range, where would you expect any mood? What would you be less surprised? It breaks out kind of downside or the upside? I would be surprised if it broke out either way. Real way. I really would. Um, so your, even in your head, you’re balanced. Even tried to get a bias on my head it’s never balanced. But yeah, I’m still, maybe the market will be a little bit more on that
Speaker 3: (30:37)
defensive in the, in the first quarter, but you know, will it be on the defensive enough to get below $40? I don’t think so because I think demand is going to be looking to stay strong. It’s the way, you know, we still have the whole winter, we’re going into the winter with low diesel stocks. Oh, you know, I, I really don’t, it’s hard to trace the market really coming off hard. And, uh, alternatively on the upside, yeah. If we get a very cold winter, which is usually good for a couple of hundred thousand barrels a day, if not more of a diesel slash Gasol demand. Um, yeah, you might, maybe you get to run to the, uh, maybe you can get a run up.
Speaker 2: (31:24)
And so where I also pull out from your talk, just to finish up the year, you, you could see gas cracks weakened from here. Yes. And heating oil or distillate, he, we call it heating oil to dislike contract. Uh, you would you see that staying firm or I’d be leery of selling, um,
Speaker 3: (31:48)
diesel cracks. I mean, it’s certainly, you know, they have, it was definitely overbought on, on the upside, but, and then we’re beginning to come off now, but, um, you know, I would, I’d be leery of selling that and unless of course you’re, you’re hedging it, you know, for a refiner type, um, they’re great. So for a hedge,
Speaker 1: (32:10)
oh yeah, I feel over it. Right. But you never ever would sell gasoline and by ever, ever that is affectionately don or lots of effects of the lead though, of course, as the widow maker, maker trade I would do, I would not do that and I would, yeah. Either way I would just stay out of those. Okay. Thank you very much. This is Jim Colburn. I’m here with Andy Lebow. This is commodity research group. Check us out. Commodity research
Speaker 4: (32:40)