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  • #8,341
  • May 31, 2020 2:27am May 31, 2020 2:27am
I would suggest you buy when money managers cool off their positions

It's late now, i would wait for some good dips now

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  • #8,342
  • May 31, 2020 2:40pm May 31, 2020 2:40pm
#BRENT / H4 & H1
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  • #8,343
  • May 31, 2020 4:01pm May 31, 2020 4:01pm
seems like OPEC may be meeting on 4 June, almost a week earlier than planned to discuss extension of cuts but really, they didn't cut as much as promised. only 74%

https://oilprice.com/Latest-Energy-N...74-In-May.html

yet market still sees this as a positive judging by the price breaking higher just now. i just don't get it...
  • #8,344
  • Jun 1, 2020 2:19am Jun 1, 2020 2:19am
Quoting tonny47
seems like OPEC may be meeting on 4 June, almost a week earlier than planned to discuss extension of cuts but really, they didn't cut as much as promised. only 74% https://oilprice.com/Latest-Energy-N...74-In-May.html yet market still sees this as a positive judging by the price breaking higher just now. i just don't get it...
Maybe the market expect much more cut, i don't know

I'm still very bullish, but buying here i just can't. i wish it goes sky high to 50/60 dollars and i'm done
COT: The precious data ignored
  • #8,345
  • Jun 1, 2020 5:40am Jun 1, 2020 5:40am
Quoting tonny47
seems like OPEC may be meeting on 4 June, almost a week earlier than planned to discuss extension of cuts but really, they didn't cut as much as promised. only 74% https://oilprice.com/Latest-Energy-N...74-In-May.html yet market still sees this as a positive judging by the price breaking higher just now. i just don't get it...

Traders got smoked holding futures contracts and needed to get out of positions before delivery date. They needed to offset their long positions.With so much selling it sent prices negative, resulting in more loses, margin calls etc. At time of settlement delivery is either made in physical oil or cash (spot). My theory is that some persons who bought oil from these traders got it dirt cheap whether physical or cash equivalent. Take a look at spot price, it is going up on low volatility at the moment. They are still buying up lots of the contracts. Oil spot is crazy liquid, especially for longs. My guess is futures is not as liquid right now. Remember a part of futures is for speculation only. Anyway, while we will all like to believe in a supply and demand of physical product governing prices, you can't ignore the positions and circumstances of the participants involved. If producing countries need oil to be at a certain level to run a country, what's stopping them from coming together to push oil above that level regardless of supply and demand dynamics. If you owned a business selling laptops at an average price of £500 and you need to sell at £100 to break even, will you sell at £ 20 because customers aren't buying at the moment Due to circumstances? Sometimes you just have to dump most of the perceived fundamentals and distill it to that one main most important irrefutable fact. OPEC will push price higher.
  • #8,346
  • Jun 1, 2020 6:26am Jun 1, 2020 6:26am
Quoting seth10
{quote} Traders got smoked holding futures contracts and needed to get out of positions before delivery date. They needed to offset their long positions.With so much selling it sent prices negative, resulting in more loses, margin calls etc. At time of settlement delivery is either made in physical oil or cash (spot). My theory is that some persons who bought oil from these traders got it dirt cheap whether physical or cash equivalent. Take a look at spot price, it is going up on low volatility at the moment. They are still buying up lots of the...
agree, cash and physical is different. but how do OPEC countries affect the futures price other than promising cuts? they are not going to buy laptops from themselves for £800 only to create shortage and push price higher
  • #8,347
  • Jun 1, 2020 9:19am Jun 1, 2020 9:19am
we might get a little dip here, if we get pass that little support below it may drop 100-150 pips. price action is weird at the moment
  • #8,348
  • Jun 1, 2020 9:38am Jun 1, 2020 9:38am
Quoting tonny47
{quote} agree, cash and physical is different. but how do OPEC countries affect the futures price other than promising cuts? they are not going to buy laptops from themselves for £800 only to create shortage and push price higher
I understand where you are coming from, but put your self in position of a large producer. Not only a producer of oil, but a government that depends on it for the country to function. What would you do? You need the price of oil to be above 50, it is currently at 11. Before that Speculators and oil hedgers went in large around 40 a barrel. You took the opposite sides. Speculators did not expect that drop. I belive that drop was a speculative run and also an attack on us shale producers. When speculators failed to offset their positions before expiry, they paid their losses in cash at that low price. The ones that did manage to sell their contracts still lost. If you were oil government or a market maker for government.,You would have received cash at settlement.You didn't have to take physical delivery of the product.

The oil hedgers who would have bought at 40 either had to take physical delivery at that price or paid in cash settlement. If they paid cash, they would have then after bought up physical crude at lower spot prices. Remember in the crude spot major players are airlines and cruisers, refineries,military. The decision to bailout cruise lines and airlines wasn't just a result of corvid19 lockdowns and low stock prices, I believe it was also due to hedging losses.

Traders are still selling off next futures contracts and some are going short. It means there is still a market. you would have bought up those contracts for the next front month. Now comes the news about OPEC cuts. Then possible extended cuts to drive speculators in buying to boost your speculative positions.. buying at the moment seems attractive, after all price is below 50 a barrel. When WTI makes up the gap, more speculators will join. The futures market compared to spot is huge. Increased liquidity will soon return to futures as traders get they feet back in.

The saudis and Russians lost a lot of money on the spot market when oil was below 50 a barrel. Any speculative gains would have helped to offset those .losses.

Governments, contrary to popular believe do speculate sometimes.
  • #8,349
  • Edited 8:34pm Jun 1, 2020 1:17pm | Edited 8:34pm
There's been no confirmation of any OPEC/OPEC+ meeting being moved up. So far, rumors are swirling about a June 4th meeting, They look legit except some are reporting it as an OPEC and others OPEC+. Not sure which one yet. It could be a volatile week for WTI. I'm thinking upward price pressures if there moving up the meetings in the name of cuts.
We must learn who is gold, and who is gold plated
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  • #8,350
  • Jun 1, 2020 2:16pm Jun 1, 2020 2:16pm
WTI went up by $0.84 or 3% today within a small range of $1.31 producing a very good trading environment.
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  • #8,351
  • Jun 2, 2020 1:50am Jun 2, 2020 1:50am
I think crude oil will be hard to rise this year. with covid status still going on.
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  • #8,352
  • Jun 2, 2020 6:04am Jun 2, 2020 6:04am
Quoting kavanto
I think crude oil will be hard to rise this year. with covid status still going on. {image}
What am I looking at here?
  • #8,353
  • Jun 2, 2020 7:00am Jun 2, 2020 7:00am
Quoting tonny47
{quote} What am I looking at here?
Just the inventory report it seems. Not much to do with his post.
  • #8,354
  • Jun 2, 2020 8:17am Jun 2, 2020 8:17am
Quoting Kwame Freder
we might get a little dip here, if we get pass that little support below it may drop 100-150 pips. price action is weird at the moment
Nope Nope Nope even more bullish than i thought. get the feeling this thing might just rip upwards with no mercy.
  • #8,355
  • Edited 12:15pm Jun 2, 2020 12:04pm | Edited 12:15pm
I haven't seen a single time (on a daily basis over the past 10 years) where price didn't touch the band once it starts rising or falling this way.

It would mean price may go above 39 (or another 10%)

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COT: The precious data ignored
  • #8,356
  • Jun 2, 2020 12:35pm Jun 2, 2020 12:35pm
Quoting kuroro001
I haven't seen a single time (on a daily basis over the past 10 years) where price didn't touch the band once it starts rising or falling this way. It would mean price may go above 39 (or another 10%) {image}
40 is a strong psychological barrier so I would be very surprised if there is not some sort of selloff
  • #8,357
  • Jun 2, 2020 1:18pm Jun 2, 2020 1:18pm
Quoting tonny47
{quote} 40 is a strong psychological barrier so I would be very surprised if there is not some sort of selloff
Gap attraction towards 42 dollars, watch out

From history, it seems gaps are always filled, most likely quickly

And won't close my longs until we reach 55 dollars at least
COT: The precious data ignored
  • #8,358
  • Jun 2, 2020 1:57pm Jun 2, 2020 1:57pm
Quoting kavanto
I think crude oil will be hard to rise this year. with covid status still going on. {image}


US refineries etc have been buying up oil on spot market (physical delivery), so too China and Japan. After all cargo oil is extremely cheap. If you were a buyer, no need to buy large futures contracts in the current environment where spot is cheap and you have storage capacity.


On the other hand, If you were a seller how would you handle selling oil at low prices?

To counteract this, Oil producers would hedge by buying the futures contracts to reduce losses and perhaps make a profit.
  • #8,359
  • Jun 2, 2020 1:59pm Jun 2, 2020 1:59pm
Quoting seth10
{quote} US refineries etc have been buying up oil on spot market (physical delivery), so too China and Japan. After all cargo oil is extremely cheap. If you were a buyer, no need to buy large futures contracts in the current environment where spot is cheap and you have storage capacity. On the other hand, If you were a seller how would you handle selling oil at low prices? To counteract this, Oil producers would hedge by buying the futures contracts to reduce losses and perhaps make a profit.

To end result,

Big market participants are buying oil in the spot and futures market
  • #8,360
  • Jun 2, 2020 2:14pm Jun 2, 2020 2:14pm
WTI went up by $1.31 or 4% today on a straight 45 degree angle. Last two times it did that the price promptly went down.
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