Crude oil outlook – oil rises above 73, euro breaks 1.23

Asia and brighter prospects for a stronger US recovery pushed crude oil beyond 73.32 dollars at NYMEX in electronic afternoon trading in Europe. Euro recovered part of its weakness and pushed pass 1.23 to a US dollar. By the time New York opens for business, oil should make a smart recovery and possibly break 75…Read moreRead more

Oil price outlook – Oil up again in early trading in Asia, Euro picks up slack

Oil touched 71.84, hovering near the 72 dollar level in early afternoon trading in Singapore after the dollar weakened against Euro and slid to 1.2279 from 1.2178 yesterday.

Euro outlook summary – China review, Euro at 1.2170 in Tokyo, next stop 1.18

Most analysts are now talking about 1.18 as the next new low for Euro. There were rumors of Chinese officials reviewing their Euro-zone debt holdings, more concerns about Spain and Italy and the extent, depth and length of a slowdown in Europe on account of austerity measures. The fall in Euro last night in New…Read moreRead more

Crude Oil price outlook – Crude oil crosses $71.45 at 2pm Eastern time, NYMEX higher by 3.9%

Interesting whiplash action today compared to yesterday as crude rises by almost 4% despite an EIA reported rise in crude inventories and a drop in gasoline stocks, an improvement in durable goods orders and the first decline in 10 weeks at the inventory number in Cushing, OK where deliveries for the WTI crude oil contract…Read moreRead more

Calculating Value at Risk – Caveats, qualifications, issues

Qualifications to using and Limitations of the Value at Risk (VaR) Metric VaR is dependent on historical data and therefore may never fully capture severe shocks that exceed recent or historical norms. Also if the time period used in the calculation is a relatively stable one then the computed VaR will tend to understate the…Read moreRead more

Crude Oil price outlook – Oil picks up 1.7 dollars, rises across Asia and Europe

I can finally breathe a sigh of relief as my out of money call options on oil (USO) start showing some sign of life as crude oil for July delivery picks up 1.7 dollars on rising equities, lower gasoline stocks and the expected EIA report later today. Oil rose across trading in Asia and Europe…Read moreRead more

Crude Oil Price outlook – Detecting mispricing in precious metals and crude oil using trailing correlations

I asked Agnes, our resident actuarial genius to run some more numbers on the crude oil and commodities correlation series that we had been playing with. Here is what she turned in today before heading home. If you have just arrived, the concept is simple. In times of stress correlations break down. Sometime they return…Read moreRead more

Crude Oil price outlook – Is oil fairly priced now or still expensive. Or what can a barrel of oil buy – part ii

A few posts ago we ran a simple basic analysis looking at the relative value of oil with respect to a number of other core commodities. We revisit that post again with more recent and updated data as well as add a table that allows for a quick relative comparison of commodity prices against crude…Read moreRead more

Euro and Oil outlook – Trailing correlation between crude oil prices and Euro-USD exchange rates

And here they are. The two graphs that I had promised in my earlier post on trailing correlations on the Euro-USD exchange rate and crude oil prices. The first with the Euro-USD exchange rate. The second with oil prices. While the first does not really suggest a relationship, the second raises an interesting point. This…Read moreRead more

Crude Oil price outlook – the change in trailing correlations – Crude Oil blends and Euro-USD exchange rate

I suspected that this was happening but didn’t want to pass judgment till I saw the data myself. I want you to see it yourself also. Here is 60 day trailing correlation between the various blends of crude oil and the Euro-USD exchange rate. Can you see the dive starting April 2010? The last time…Read moreRead more