Here is one takeaway:
“The exports could relieve pressure on storage capacity in the U.S. after stockpiles rose to the highest level in official data going back to 1930. The tanks at the oil hub of Cushing, the biggest in the country and the delivery point for benchmark West Texas Intermediate crude, are 92.5 percent full, according to the Energy Information Administration.”
This suggests that deep or “super” contango levels that we saw in 2008/09 are unlikely… And, some traders are positioning for the end of contango…
WTI spread options have been extremely active over the past two days.. Another 500 $.50/1.00 call spreads in Cal17 traded yesterday (these were active Wednesday, too).. Also, 1,000 1st half of 20017 -75 puts and flat calls traded.. And, June/July and July/August 2016 flat calls were trading actively… All total around 40,000 spread options in WTI traded indicating a change in the way traders are looking at the curve (moving from contango to backwardation)… This is happening in an environment where storage in Cushing is 92% full and seasonal draws are still 4 to 6 weeks away)…
Here is the link:
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