re: BOIL has become predictable

Commodity etf's that roll contracts suffer decay outside of the leveraged ones due to contango and backwardation as well. Actually an normal inverted curve does in the absence of either anyway. Perfect Keynesian theory. He believed in normal backwardation, and I classify that as an inverted curve. Although Benny could probably pick my definition apart. I know what I mean, but inverted, backwardation and normal backwardation pricing of a commodity gets confusing. Everyone deals with t every day without even realizing it. High school economic level stuff. At least in Iowa high schools. LULZ.

Anyway, cash settled up at HH (finally). Up .06 to $3.49, and we have normal backwardation (I hope) on the F&G contracts.

This is going to get interesting, expirations on the 29th, cold weather coming in that week. I have no clue when the paper stuff rolls, but I suspect they are already partially rolling to March.

I also anticipate a larger withdrawal being announced on Thursday than expected. I'm not going to trade on it because I'm not that confident, although that might change as weekly UNG calls are cheap currently. I might buy some DITM weeklies, and get out at 15% stop up. 9:29, or earlier paper in, 9:30 announcement, 9:40 for the Wall St 10 minute delay in F&G quotes.

The one thing that has held pretty constant on Thursday, is if the market is going to move, the trade is between 9:30-9:40 A.M.

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I would assume the phrase to buy "when there's blood on the street" applies in our current market, with regards to oil?

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Most definitely. Take it for what it's worth but Morgan Stanley's updated forecast projects a low of $43/barrel for Q2 of next year. That's a number that many probably never thought to associate with oil again (I assume).

I'll wait until crude gets into the 50s to see what the major oil companies are trading at before I buy.

I hope for my job we don't see 50's

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I hope for my job we don't see 50's

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The 50's are very likely going to happen. Just hope we don't see the 40's.

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Same. 50's and the industry will be dishing out layoffs.

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Too late. I work for a major O&G company and the layoffs started in November.

Good question.

We will see some of the banks and state owned energy companies being bailed out by the government as the first step.

Then no one will want to buy RU government obligations which will spike their interest rates.

Next comes the government "delaying" payments.

Then default.

I think we're talking about months, not years.

Impossible to predict as there are too many factors in play. US NG and global crude prices have been disconnected in energy equivalent terms for several years now (5.5 MMBtu NG = 1 barrel of oil). Globally US NG is still very cheap, it's just a matter of if producers can continue to produce it at a profit. There is definitely a glut of gas supply in the US that is trying very hard to find a market (LNG exports, exports to Mexico, gas to NG conversions), but the interest in those market outlets has to dwindle some as crude prices fall. If the landed cost of an LNG cargo from the US is $10/MMBtu, and crude is at $50-60, you'll start to see users start switching back to oil.

storage week total population weighted degree demand (HDD + CDD) --
last week: 167 (2cdd 165hdd)
previous week: 158 (3cdd 158hdd)
same week last yr: 173 (2cdd 171hdd)
avg: 175 (2cdd 173hdd)
next wk fcst 150 (2cdd 148hdd)
* source: NOAA


storage:
same week last yr: -92
5-yr avg: -72
*note: avg and last year storage figures are calculated using this historical data-set provided by eia:LINK

I think Thursday's report is in excess of -50.

I think you're right. I'll likely take a loss on F options expiring 12/26. We still have some time though. UNG and G calls should be decent though. Hopefully.