Crude and Gasoline Forward Curves

Global crude and gasoline benchmarks remain backwardated.

Being told this morning that NY Harbor cash gasoline is trading 42 cents above October RBOB futures.  I said in August in the WSJ that supplies were expected to remain tight for the next few months. 

"Anybody who needs to purchase gasoline over the next six months, they're locking in prices right now," said Jason Williams, an energy broker at Coquest, a brokerage firm in Dallas. "They are worried that the supply shortages might last for the next three months."

Crude

Gasoline

WTI Forward Curve Update & Physical News - 22 Feb 2012

The front 12 months are particularly curious.  Some news clippings this week:

Feb 22, via Reuters:

"Sentiment in the Asia-Pacific crude market firmed on Wednesday, with Australia's Enfield crude expected to fetch double-digit premiums due to tight supplies.

One cargo of April-lifting Enfield, which was delayed from March, being offered and could trade at a record premium above $10 to dated Brent, a trader said.

Premiums for sweet regional crudes for April have risen across the board after Cyclone Iggy disrupted Australian supplies and Sudanese grades remains off the market."

Feb 22, via Reuters:

"Russian Urals crude eased steeply on Wednesday as traders cited a spike in oil futures and expectations of a large loading programme in March as weighing on the export grade of the world's largest oil producer.

"We have yet to fully see a full loading programme for March. But people expect it to be quite good, plus there is a factor of the launch of (a new Baltic port) Ust Luga," one trader with a major said.

In the Platts window, Trafigura offered a March 3-7 cargo of Urals from the Baltic at dated Brent minus 55 cents, some 50 cents lower than price indications earlier this week, traders said.

In the Mediterranean, Eni offered a 80,000-tonne March 3-7 cargo at dated Brent minus 60 cents, some 60-70 cents lower than price indications earlier this week, traders said."

Feb 21, via Reuters:

"URALS * On Monday, Lukoil offered a March 3-7 Urals cargo from Primorsk at dated Brent minus 5 cents, some 20 cents lower than price indications last week.

UST-LUGA * Russia's new Ust-Luga Baltic oil terminal, undergoing repairs after damage caused by multiple landslides, will be ready to start loading crude in the coming weeks and may handle a few cargoes in March, a spokesman for Transneft said."

Feb 20, via Reuters:

"Russian Urals crude eased in the Baltic on Monday as fresh loading dates for March showed healthy supply volumes from the world's largest oil producer."

MS Excel

eSignal Futuresource - Hi-Res

IB TWS - Hi-Res

WTI Forward Curve: Contango in the front, backwardation beyond December 2012

For anyone curious how to trade the coming whiplash in the curve, see Downey's Oil 101. 

Interactive Broker TWS

FutureSource Workstation

On Backwardation and Forward Curves

WTI and Brent have both shifted to a backwardated curve.

WTI Forward Curve

WTI Forward Prices

Brent Forward Prices

Brent/WTI Spread Forward Curve

Friday Forward Curves: Gold, Silver, Copper, WTI & Brent

Some big moves today.

Nymex Gold

Nymex Silver

Nymex Copper

Nymex WTI

ICE Brent

NYMEX WTI Crude Update

I am by no means a technician or a fibonist.  Draw enough lines on a chart and you can create a reason for a price to go anywhere. Take these with a grain of salt.

NYMEX October, 2011 WTI

NYMEX WTI Weekly Continuation

Today's forward curve (at the moment).

I have previously touched on crude's outright price and more than likely will do so again.  As for predictions, prices will go up and then they will go down (repeat).

On "nominal highs" and forward curves

CNBC is fond of citing "nominal highs" when silver, gold, crude, or any commodity for that matter, reach new levels.  What they fail to realize, perhaps out of ignorance (my guess), or because it's a watered-down poor excuse for a financial news network, is that the back of the curve is well bid above the front month prices always quoted in financial media.

If $1580/oz scares people, $1750 would send them into paralysis. 

 

I used the futures calendar abbreviations for the expirations on the chart of the curve.