WTI Crude (CL) Futures Market, and What is Happening. BS Debunked

Wish I wasn't stuck holding DWTI, even though I think I'll make money within the next week or two.

I'd really like to take a chance on UGAZ soon. I think we're at the bottom or very close to it. Overreaction from having an injection of natural gas. Well duh, it's spring and people don't need to use heat as much.

If I manage to break even or better on DWTI it may be a buying opportunity on UWTI, but I keep reading that we're going to produce record numbers for April and May, and won't feel the effects of rigs closing until June/July time.

The natural gas futures contract has been dead for awhile now....seems like compression until the inventory # drops on Thursdays, then a directional move...ie the selloff yesterday.  Tough market to trade.

The scalps under 50.50 were successful, now we are trading up after a rejection of 50.00 even...session low at 5008. Will be selling under 50, but this looks like a rally on the close kind of day.

Most likely on the sidelines......will play shorts at upper daily ranges of 5176 and 5236...or scalps under 50.00. Other than that, chopping sideways beween 5150 and 51 flat.

Encouraging price action in that buyers put their heels on 50 today....but it looks like we will be testing the 40's again in the near future.

As of now the  (2)Sept 2015 Calls w/Strike @50.00 are pricing 11.46 p/b......the September contract is trading at 59.20 per barrel.

From January, still holding 1 June 2016 Call w/Strike @55.00 from 10.15p/b.  Currently the premium is 12.18p/b, and the contract is trading 61.90.

Also still holding June 2016 Calls w/ Strike @ 75.50 from 1.86 p/b. Currently these are out of the money, priced at 1.44 p/b.

We will be looking to roll to the June contract either tomorrow or Friday....it is currently trading 57.35. The call entries when CL was in the low 40's have paid off from a timing standpoint.

So, tomorrow I plan to dump the June 2016 call w/Strike at 55.00....that was an expensive venture, and a chance to turn a few bucks on it and get it off of the books is a welcome scenario, as my call for a dramatic rally just has not developed. 

As for the Sept 2015 calls, that is a nice profit for one month's work......will be racking the profits on (1) contract and letting the other one ride for the time being......IF we get a nice pop to my 38% fibby on the monthly CL chart @6498 (that # will change on rollover) by the end of April, I will exit that one as well......if not, it stands until end of May when it will be re-evaluated.

More than likely the June contracts w/strike @75.50 are dead in the water......they were cheap, but we are going to have to see a major appreciation to see any money out of them at all.....they were my "flyers", but a print of 75 this summer will be necessary to see any money at all out of them.

All in all, the timing for the Calls and the bottom of 44-40 even have been very lucrative this year, both back in early February, and now in April.

Out (1) Sept 15 call @ 11.29 p/b. Outstanding price......... Out (1) June 2016 Call @ 11.20 p/b.  Decided to walk on the June 2016 call @55. Possible re-entry if CL cycles down this summer.

Letting 1 Sept call ride for now. Rollover coming on, May trading 55.82 as this is typed.

Not certain where we go from here...mid 60's in the near future is my ideal scenario....just have to wait and see.

Trend day up.....printing 58.22 as of this writing. 

Looks like we may test 60 even soon......the dynamics of this market are changing, institutions are getting long.  This thing has the feel of a major rally in the offing.

Last week's high @ 58.80.....I would be looking for a test of that area later today or tomorrow.....possible breakout to the key 38% fib at 6996 in the near future.

That is an 11 dollar difference in pricing; admittedly that is a heck of gap......but, I remember trading crude during Arab Spring; I saw trading halted twice, and a 9 dollar range put in during US trading hours (7am-1230pm mtn time....old Crude pit hours).

Currently, we are looking at tremendous daily volumes day in and day out.......IF we get some sort of outlier event with this much interest participating, then we could look at a serious gap up in a big hurry.

Just have to wait and see.

Trading June CL. 5907 print as of this writing.......could look at 60 even this session, or consolidate after this week's rally. Bullish formation on the daily chart, possible beginning of a substantial uptrend....need to see some strength above yesterday's high, so far sellers have their backs against 5950.

Key Fibby # to the top is 38% of the weekly and monthly  charts for June CL....65.90.  Commonality between the two charts, correspondence of the wave of selling that we saw last fall.

I expect an eventual run at 65.90 and then some chop.....right now the Sept 15 calls are pricing 12.13....waiting for a close above 60, and then will get a juicy premium. With any luck we can get some good jam, maybe close out those 2016 75$ strike calls with a bit of cash for the effort.

I agree. The institutional money is getting long.... for the immediate or distant future, who knows....have to wait and find out.

The "fundamental analysis" of crude oil certainly lends itself to seeing a glut of supply, thus a period of depressed pricing. My contention is that there has always been plenty of oil.....when it comes to crude, it is a manipulated market pure and simple, and pricing reflects institutional attitudes.  

The high frequency guys and the black boxes increase volatility in the short time frames, but when key levels are established, the institutions dictate where price should be.

Admittedly, when I hear the "supply and demand" argument for pricing, and fundamental industry analysis as it pertains to the price of a barrel of crude oil, I roll my eyes.

Not a whole lot of fancy predictions for this week; most certainly will not win a nobel prize for economic analysis.

The monster in the CL market is 60.00. We saw some heavy selling come in at 5990 of the June contract late last week......a lot of guys stepped and played their shorts with 60.00 as their back. As of now, there are still a ton of short positions riding from Friday's session.

Friday's session looks to be a potential lynchpin for a move either to the bull, OR to the bear....IF I knew for sure which way this thing would trade in the short term, then I would have a position in the outrights. 

So, I am looking to sell at Friday's low at 5831; but more preferably, looking to buy at 5991 and play the pop over 60 and ride it for a bit. I have a strong buy signal set up at 5991...we will see what the short time frames dictate, but we could check out the key # 38% on the weekly and monthly CL June chart at 6590 with the initial break over 60.00 in short order...ultimately, I think that area is where our intermediate-term price of CL will be decided.

I agree with your analysis Wall.......I am just not convinced that it will show up in pricing. There is no doubt that there is a glut of oil supply right now; no doubt at all.

Back in the 90's I had a family member that was a fairly large oil trader on Wall Street....he used to tell me stories of the Saudis loading up a tanker with crude, then calling their brokers to run the price of oil up while the tanker was in transit to the US....in some instances they would have the captain circle the tanker out in the Atlantic until they were satisfied with the price of the oil. Pretty funny stuff.

As for the washout in the Bakken, I can tell you that there has been some consolidation of the fracking industry.  A few years back I worked over there (for a company nicknamed "big red")......as of now, they have laid off all of the guys they brought in to work, as well as a great number of their engineers.  Admittedly, this is standard operating procedure for a big company to weather a downturn, but mom and pop driller have not faired as well..... the capital structures of some of the smaller drillers and fracking outfits are not unlike the housing guys that went belly up in 08.....as long as they are drilling then everything is fine; they aren't drilling now.

Print of 5932 as of now...we may run at 60 today, or sell off. Just have to wait and see.

6078 print June CL.........6590 could come into play. We will see if the US session continues to the bull...IF this develops into a big trend day up, I will be looking to close out the option plays and rack some chips.

As of now, market structure on the 30 minute chart reads trend day up; next keys will be 6100,50,6200 etc. Sort of a mixed bag on the US open around 6050.

Still, bullish read, but as always, intraday reads can change on a dime.

^ So where do you see crude going from here WallStreet?

We hit that magic $60 a barrel number that the bulls have been calling for.

So I guess you're a fundamentals guy I figure? I've been tracking crude and NG for 6 months and I decided a long time ago that fundamentals mean nothing.

I've got a lot of money shorting oil going into the report tomorrow. If it keeps going up I'm going to cut my losses, but I'm going to consider going long at that point due to the extreme bullishness of it.

Now people are calling for $65 within a week and $70+ by the end of the month.

Ok.....

High print of 6258 on the WTI news release.  Closed out of the Sept 2015 Call 50$ strike @ 13.38.

Also closed out of the June 2016 calls w strike of 75 @ 2.42.

So, as of now, I am officially flat in the options market......this year has yielded some very good trades in that regard....I did not get my fast jump to 75.00 earlier on this year, but all in all the trade entry with CL trading between 44-40.00 was gold.

From here I expect compression between 60-65, with the big fight at 65.90...that long -term 38% number will prove to be a major point of contention.

The Sept calls were nice trades....I have hit them twice this year. The June 2016 calls were more about cutting liabilities than racking profits.  CL has become very choppy intraday since we traded over 60. 

Not a whole lot left to do but wait and see how this thing unfolds. It would not surprise me to see a big hammer come in and knock us to 55ish, but after we roll to the July contract I would be looking at 70 being more probable. 

I can see the rationale in holding shorts, but in my opinion, I wouldn't be short this market until we print in the mid 60's.

Best of luck to everyone playing this thing...

Not a whole lot going on in the CL market this week...extremely tight trading, 310 range for the week.

60.00 is the lynchpin....cant seem to get too far away from it. Pretty good break to the bull on Tuesday, but the action is coming in at all hours of the day and night.  The US day session has been pretty tight.

The algos are still running things....seeing pretty consistent bumps in volumes around previous day's extremes, while a majority of the session traders are playing rotation.

One thing is for sure....this market is not trending....scalping a few ticks here and there is about all that has been available this week. IMO the most likely scenario is an upward grind to the 6590, but I do not rule out the possibility of some big institutions taking money off of the table and slamming this thing to 55 ish.

From here, I have no opinion in the short term, but long term I find it hard to b e short this market; looks to be the kind that will grind higher with regularity until the shorts are eventually exhausted.

Grinding higher.....60.60 print on the July contract.  Substantial selling in spots, but the charts seem to grind higher more often than not.

Market structure on the 30m CL chart has been erratic....we have made a bit of a range today, but yesterday was beyond tight.

Not sure where we go from here.....the big 38% # for this whole move (on the July contract...june 38% was 6590 as mentioned before) is 6678. That level is key for any long term diagnosis.

Not the best scalping market either at the present moment....GC is quiet, the currencies are quiet....looks like most guys are in the equities.

I would welcome any sort of movement...to the bull or bear. Very tight last week, tough trading.

A ride to the low 40's is improbable....I could see a scenario with a run to 55-50ish, and then a long period of sideways trading, but for crude to trend down hard in the summer months to 40.00 is not very likely.

IMO, this market is going to trade up and test the numbers in the mid or upper 60's in the month of June, followed by compression and rotation until the winter months.