Comments on: James Bianco on Possible Role of SemGroup Bankruptcy in Oil Price Drop

By: Anonymous

Anonymous — Fri, 25 Jul 2008 11:16:00 +0000

So this is how speculators don’t affect the price of oil.

By: Peter

Peter — Thu, 24 Jul 2008 14:07:00 +0000

As we note in the next block, an ambiguous SEC-ruling designed to rein in the shorting of 19 financial stocks, all that were easy to borrow (see this comment), is at first blush just a tiny sliver of the U.S. domestic equity market. However, as S3 Matching says below, this rule caused almost all shorting to stop and was the catalyst for the sharp stock market rally last week.

Sorry if I'm being stupid, but where can I find this 'next block' 'this comment' and/or 's3 matching says below?' I'm trying to find the clear references but am failing. Help please.

By: Doc Holiday

Doc Holiday — Thu, 24 Jul 2008 04:33:00 +0000

For some reason, I’m thinking Hunt Brothers and silver?

By: mxq

mxq — Thu, 24 Jul 2008 04:05:00 +0000

Just to add...althought the DOE numbers are only US, if we are going to be in the triple digit crude range, we should not be seeing higher-than-average builds in diesel inventory like we have over the past few weeks.

imo, this is a negtive signal for oil prices -- Given that refiners are drowning in gasoline supplies (which btw, according to the DOE numbers, are 30% higher than the 5-year average) -- they literally have no place to put it -- refiners HAVE to move diesel because its the only product that is keeping their margins (cracks) from imploding completely.

The fact that they are not moving diesel suggests slowing BRIC/EM demand?

Also, lets not forget that natgas is off almost 30% from its all time high made in early July. I wonder if SEM has anything to do with blowing that trade apart??

By: ndk

ndk — Thu, 24 Jul 2008 01:56:00 +0000

The WTI/Brent correlation is another interesting data point to watch. WTI should always be priced higher than Brent due to superior product yield, but this flips sometimes. It flipped pretty sharply during the early ‘07 correction.

http://www.dallasfed.org/research/energy/images/en0701c3.gif

It’s inverted sharply and suddenly again, from a $4 premium at the $147 peak to $2-3 cheaper during this fall. That’s suggestive of fireworks in the WTI market.

Sorry for spamming the blog. It’s a topic near and dear to my heart.

By: ndk

ndk — Thu, 24 Jul 2008 01:10:00 +0000

That’s a great chart, mr. sparkle. Most interesting to me is the persistent decay in interest in the CLZ08 contract. Could you add CLZ09-12 open interest to future charts as well?

I’m hoping for a price just below $100 that persists or drifts upward slowly for awhile, and a significant further drop in open interest. It’d be a wonderful opportunity.

By: Mr.Sparkle

Mr.Sparkle — Thu, 24 Jul 2008 00:22:00 +0000

Here’s the chart of NYMEX Futures open interest in crude with price/bbl up until yesterday when August contracts were assigned.

http://img293.imageshack.us/img293/1899/crudeoichart072208bk7.png

It’s a big chart so you might have to make your browser window bigger.

By: Danny

Danny — Wed, 23 Jul 2008 23:02:00 +0000

Track XLF vs USO. They have traded as opposites since the financial storm began in August. I think this has a lot more to do with that, than this firm collapsing, although I’m sure this hasn’t helped.

By: Mr.Sparkle

Mr.Sparkle — Wed, 23 Jul 2008 22:47:00 +0000

Some of you might remember a chart I posted with daily open interest on NYMEX futures and the front-month price imposed over it. This was in a discussion on a Hausman article I believe. I’ll be posting another update of that in a bit.

By: Anonymous

Anonymous — Wed, 23 Jul 2008 22:33:00 +0000

I think they shot Shorty and then they took his gun.