Here is the note that I have referred to a number of times in the past on this site. Written by Nauman Khan at InvestBank in mid March and release for public consumption in early April, Nauman correctly pointed out that the fundamentals for Oil outlook were very weak. His basic thesis in the note…Read more
May 2010
Peak oil debunked – revisited 10 years later
4 years after JD walked away from the Peak Oil Debunked blog, I discovered his post and his blog playing with wonder wheel on Google. And what a treasure trove of information I found. In a world of oil bulls it was really getting lonely as a bear and I finally found company, real data…Read more
Trading Crude Oil – USO Options
So the consensus from the last three weeks of research is that if as retail investor you would like to take exposure to oil (going up or going down), the best bet is USO. An ETF that is relatively liquid compared to other ETFs and ETN’s. And as Seeking Alpha points out keep an eye…Read more
Trading crude oil futures on NYMEX – contract specifications
From the NYMEX website Light Sweet Crude (CL) Futures: 1,000 U.S. barrels (42,000 U.S. gallons) Options: One light, sweet crude oil futures contract. Trading Months Futures: 30 consecutive months commencing with the next calendar month plus long-dated contracts listed at 48, 60, 72, and 84 months prior to delivery. Options: 12 consecutive months plus 3…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.
Crude Oil Insights – Trading options on Oil – Strategy review
Long Call A call option is suitable when your outlook for the market is bullish. Since you are purchasing the call option, you need to allow enough time to expiration for the stock to move and reduce the effect of time decay. The potential gain in this strategy is unlimited, whereas, the maximum loss…Read more
Crude Oil prices: The Euro crisis, its implication on interim oil prices, Euro-zone and PIGS growth forecasts
Crude oil prices in Europe are now more expensive in relative terms than crude prices in the US. Take a look at the two charts presented below
Crude Oil Price outlook: What can a barrel of oil buy?
What can a barrel of crude oil buy and does that tell us anything at all about the direction and relative value of oil prices. Staring Monday morning I will officially go ahead and short oil. For the rationale for this suicidal move, please see the following evidence. Price across the commodity universe are back…Read more