/biz/ - Business & Finance

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

Proof in the picture,

More info on ICE Brent:
https://www.theice.com/products/219/Brent-Crude-Futures

You can also check it yourself (you need to register and fake you represent a company to see the Dated Brent Price):
https://www.spglobal.com/platts/en/our-methodology/price-assessments/oil/dated-brent-price-assessment-explained#

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.