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 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 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 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 more
Oil price outlook – BAML revises crude oil outlook downwards
Bank of American Merrill Lynch (BAML) finally updated their 2010 second half crude oil numbers downwards to 78 from their earlier reiterated outlook of 92. BAML was one of the few oil bulls left standing when oil continued its march northwards of 85, side by side by Goldman Sachs (GS). While a lot of analysts…Read more
Crude Oil Insights – Hedging oil exposure, tests of hedge effectiveness and correlations of crude oil blends across time
Trailing correlation across crude oil blends from 1995 – 2010. Great data, lovely graphs but terrible news for hedge effectiveness test as per accounting standards.
The relevance of North Sea Oil, Offshore drilling and Crude Oil Bulls.
Leo at Peace Corp Writers provides an interesting perspective on incremental drilling, marginal pricing and the relevance of North Sea Oil in understanding the current sentiment around crude oil prices. His pitch is simple. Demand is static, focus and fix the supply side to control oil prices.
Crude oil price outlook – truth or dare?
The smart money in the room is on Saudis. These guys produce between 10 – 12.5 million barrels of crude every day. They have been playing, setting and influencing the market for more than 40 years. They own the swing vote on production right now till Iraq catches up. Two words (production cut or production…Read more
Understanding the crude oil classification terminology – step one
The petrochemical industry classifies crude oil by the geographic location it is produced, its API gravity (an oil industry measure of density denoting the wax content of the oil), and by its sulfur content. light if it has low density or heavy if it has high density (higher specific gravity is better and lighter); sweet…Read more