And we are off, should see a spike and a gap up on market open across indices, markets and oil. The China reserve review rumor yesterday had markets in turmoil on anticipated Euro weaknesses. The China denial today pushed Euro as high 1.2342 in Europe and has pushed all markets beyond the green line. Once…Read more
Crude Price Outlook
Trading crude oil volatility – Crude oil future spreads are at it again.
Nauman Khan, Mohammed Bux and Agnes, our three resident oil geniuses, pulled some interesting data and graphs today. The first shows the spread as a percentage of spot price (WTI) for NYMEX CL3, CL6, CL10 and CL12 crude oil future contracts. As we had mentioned earlier in the NYMEX contract specification post, CL3, CL6, CL10…Read more
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 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 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
Crude Oil Trading – Weekly oil price outlook
The key factors to consider right now are the liquidity and solvency concerns being raised due to the contagion effect of the European debt crisis. Both these concerns are being raised due to fear for lack of availability of credit to businesses and are reinforced by the jump in LIBOR rates. If these credit concerns…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