Hello bobos, professional financial analyst here. I work for a large energy company and while I do not handle commodities myself, my fellows are doing acquirement and hedging. I am not able to give you any info that is not publicly available, but I can show that shorting oil with exit in 1-2 days is how you print now.
There is a huge oil FOMO ongoing. People are hoping to get rich by skyrocketing oil prices. However, the futures price is not the same as real physical price that the companies are paying. That is significantly less. ICE Brent June futures are expiring tomorrow and most the derivatives of ICE are expiring today. The derivatives are cash-settled, while ICE Brent futures are deliverable with cash option. The settlement price will be announced a day after trading is stopped, given by the Dated Brent Index calculated based on real deliveries. Futures are trading at a major premium compared to Dated Brent.
>ICE Brent June futures expiring tomorrow, derivatives (CME etc) expiring today >Brent is also deliverable contract, but unlike WTI, Brent can be cash-settled >Brent cash settlement price is calculated based on physical Brent delivery prices, price given by Dated Brent Price >Dated Brent has been at significantly lower levels than the Futures >This price will get corrected, just like the WTI Futures tanked. Though, Brent is NOT going to negative territory
tldr; Short Oil, WTI or Brent. Doesn't really matter, if Brent tanks, so does WTI. WTI has a significantly higher risk for margin calls due to lower price causing massive price fluctuations or Trump tweeting some shit. Find a good entry point today afternoon.
Hey dumbass. American oil producer stocks went up on the day WTI went -38
Justin Kelly
Who the fuck cares about the companies, short the commodity.
Oil companies went up because people are expecting bailouts.
Blake Long
Oil companies are going up because global economies are reopening. Anyone shorting oil now is a complete dumbass
Parker Myers
Lmao retard, you don't understand the difference between commodity and company? Shit, how so I short you
Christian James
Read the proof and give one good actual reason to go long on commodity that is trading on 25% premium over real price.
Samuel Nguyen
This seems pretty legit, but I'm afraid of the current pump. Maybe I'll try to catch the next green candle.
Oil went up like 20% yesterday without any real reason in oil markets, exept FOMO over Saudi cuts, that are not necessary to cover the demand drop anyway.
Chase Brooks
>just short the bottom >professional financial analyst
How much do you think this affects july brent contract aswell, still safe to short that? my shitty broker only has allowed trading july's contract since monday
Evan Perry
This graph isn't up to date but it's still relevant enough.
Why on earth would you SHORT oil right now? Sure, we've had an unprecedented drop in demand and rise in supply, we really can't rule out single digit prices for a long time, but that's really when you should be buying.
Well if will affect but much less. Honestly, I don't have enough information right now. Generally people expect the demand to lift a little bit + massive amounts of new storage being built before July so while oil probably stays low for some time, I doubt July/August ever sees sub 15 USD. But this is just a guess.
Levi Carter
>Why on earth would you SHORT oil right now? Sure, we've had an unprecedented drop in demand and rise in supply, we really can't rule out single digit prices for a long time, but that's really when you should be buying.
1. Reasons explained in the thread 2. There has never been such a worldwide sudden drop in oil demand causing massive demand-supply disparity and it's not going to be fixed soon 3. I'm only talking about two days. After that, I'm probably long for some 4. June futures expiring in one day is not dependent on the price we see in 3 months. If you see oil going up within the next 3-6 months, you buy later futures. Keep in mind that 6 month forward futures are already priced 50% higher.
Chase King
So you’re saying I should go all in on BNO
Logan Myers
Even if you are long on oil, USO and BNO are shitty ways to invest to oil in the current setting because of the way they work, rolling into futures. This is because of the massive storage costs that affect the pricing levels of different expiry time futures.
If you are long, just buy the individual later futures
Gavin Young
So basically, negative wti is about to hit again, and the recent oil price rise has been a short squeeze. Is everyone lying industry wide when it comes to capacity? Biz was talking may-June, rystad was talking 2nd week of may, what you’re implying is batically a week max until oilmageddon hits
Liam White
Is shorting WTI 2 days before june contract expires a good idea ?
Hi I'm an absolute smooth brain with 1k on interactive brokers can you tell me word for word how to maximize these potential gains? I just got literally burned from plus500talmud edition.
>So basically, negative wti is about to hit again, and the recent oil price rise has been a short squeeze. Is everyone lying industry wide when it comes to capacity? Biz was talking may-June, rystad was talking 2nd week of may, what you’re implying is batically a week max until oilmageddon hits
No I don't think negative WTI will happen in two days. Significant drop, probably. WTI *might* go negative but if that happens that is right before 20th May.
I'm not talking about negative Brent either, just a relatively significant correction in the range of maybe 20% within the next 48 hours. Not massive, but surely a nice gain if you leverage.
Daniel Campbell
Might be, depends how much capacity is added and how much demand increases. Too hard to say this early, but I expect a major drop to happen during that time. But you need to be REALLY careful with that: A fuckton of people are expecting negative WTI and have the same idea, big players want to burn your shorts. Don't use too much of leverage. And I'd advice to be more early than 2 days.
Caleb Robinson
Aaah a short play, I gotcha. I may get some puts on wti if it looks good this afternoon. Yeah I’ve been trying to feel out when exactly max storage is going to hit, when it happens the entire market gets a large, and final punch to the face. Brent won’t go negative but single digit is possible. Tankers will do well into q2 or further, but otherwise it’s a slow climb back to normal after that. (“Normal”, anyway)
Nathaniel Williams
If you have only 1k don't risk it. Invest in stiff that has a guaranteed return: Hookers, weed ect.
Blake Howard
Thanks fren. I will be using 5x leverage
Oliver King
Only 1k in stocks but I can bump that up to 5k if its really worth it.
Honestly I buy random shit coins and dump them after I start them being spammed on biz
Brandon Adams
There is some nice spike action in WTI right now. I think good entry point might be after opening. But it's also possible we see the FOMO continue throughout the day. Don't put all at once.
Brayden Brooks
Friendly reminder: Do not take anyone claiming to be a professional seriously on Yas Forums. Make your own judgement: 1. What is the rational behind the claims 2. Is there proof to it 3. What is the alternative scenario
The alternative scenarios are: Oil pump continues at same pace as yesterday. As oil is cheap as fuck, a few dollars implies 20-30% jumps. That will burn your 5x leverage instantly.
The second alternative is that something has radically changed in the expectations of oil buyers within the last few days that we are unaware of.
If the reason you short is because I told you to, DO NOT DO IT. I repeat: ONLY do it if your own rationale tells you to.
Lastly: whatever happens, the upward risk is massive. Even if there is big drop, you can still get burned a day after.
This is an extremely risky play.
Ayden Lopez
Read this
Dylan Rodriguez
So its supposed to expire 18.00 uk time tomorrow right? WTI started showing panic selling about 24 hours beforehand the expiry point. I think the entry point for short could be around few hours after US open, thoughts?
Joshua Butler
Yeah, this kind of play i'd put maybe a hundred on at most. Really depends on how options premiums look on open. I've been mostly vested in tankers, exit for that play is sometime in July-August. Market still hasn't caught on to just how insane they're going to do, the freaking handy size (aka smallest tankers) are making 10x normal earnings. Market definitely seems dumb enough to run the stock of some of the companies up 10x as well, ez printing to be had over there as well. Thanks for the tip off though, that's why people like us come here.
Robert Sullivan
Something like this yea. Also US denoted Brent futures are expiring today at US close.
Gabriel Lopez
Today op was not a faggot
Juan Clark
>Market definitely seems dumb enough to run the stock of some of the companies up 10x as well This, never under estimate the irrationality of the markets. It can easily happen that a lot of traders just let their derivatives expire only to receive their settlement at 20% loss few days after.
