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/biz/ - Business & Finance


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File: 225 KB, 720x1141, brentsettlement.jpg [View same] [iqdb] [saucenao] [google]
18748735 No.18748735 [Reply] [Original]

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.

>> No.18748757

>>18748735
Hey dumbass. American oil producer stocks went up on the day WTI went -38

>> No.18748785

>>18748757
>>18748757
Who the fuck cares about the companies, short the commodity.

Oil companies went up because people are expecting bailouts.

>> No.18748808

>>18748785
Oil companies are going up because global economies are reopening. Anyone shorting oil now is a complete dumbass

>> No.18748825

>>18748808
Lmao retard, you don't understand the difference between commodity and company? Shit, how so I short you

>> No.18748911

>>18748757
>>18748808
Read the proof and give one good actual reason to go long on commodity that is trading on 25% premium over real price.

>> No.18748982

>>18748735
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.

>> No.18748991
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18748991

>>18748735
>just short the bottom
>professional financial analyst

>> No.18749023

>>18748911
All you have to do is look at the July contracts

>> No.18749030

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

>> No.18749195
File: 216 KB, 1280x838, 1280px-Crude_oil_prices_since_1861.png [View same] [iqdb] [saucenao] [google]
18749195

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.

A war will come along.

>> No.18749230

>>18749030
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.

>> No.18749310

>>18749195
>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.

>> No.18749316

So you’re saying I should go all in on BNO

>> No.18749423

>>18749316
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

>> No.18749439

>>18749230
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.18749452
File: 170 KB, 500x358, 1588020499184.png [View same] [iqdb] [saucenao] [google]
18749452

>>18749423
Is shorting WTI 2 days before june contract expires a good idea ?

>> No.18749454
File: 81 KB, 547x531, 1586501622750.jpg [View same] [iqdb] [saucenao] [google]
18749454

>>18748735
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.

please don't meme on me I need this....
>xaficad311@tmajre.com

>> No.18749474

>>18749439
>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.

>> No.18749517

>>18749452
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.

>> No.18749533

>>18749474
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)

>> No.18749557

>>18749454
If you have only 1k don't risk it. Invest in stiff that has a guaranteed return: Hookers, weed ect.

>> No.18749582

>>18749517
Thanks fren. I will be using 5x leverage

>> No.18749612

>>18749557
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

>> No.18749616

>>18749533
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.

>> No.18749700

>>18749612
>>18749616

Friendly reminder:
Do not take anyone claiming to be a professional seriously on /biz/. 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.

>> No.18749716

>>18749582

Read this >>18749700

>> No.18749738

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?

>> No.18749759

>>18749616
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.

>> No.18749767

>>18749738
Something like this yea. Also US denoted Brent futures are expiring today at US close.

>> No.18749788

Today op was not a faggot

>> No.18749810

>>18749759
>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.

>> No.18749980

>>18749423
Can you short bno? Would this have the same effect? May 15 puts?

>> No.18750013

Can any anons recommend a leveraged oil ETF listed on the London Stock Exchange?

I've found 3BSR but there seems to be 0 volume on that

>> No.18750036

>>18749980
Im not expert in oil etfs, but currently oil funds are not tracking the oil prices as they should so I'd say no. But desu I have no idea.

>> No.18750043

>>18749810
> 20% loss few days after.
Ouch. Is this common in commodities? You get stuck bag holding, if you can't take delivery?

>> No.18750051

>>18750013
Oil ETFs have largely moved to later contracts to avoid risk plus they are not tracking the prices anyway so no

>> No.18750083

>>18750051
Fuck, guess I'm going have to play this via spread betting on IG Index then

>> No.18750085

Major resistance line right now, make or break moment. If it breaks the line it could pump for few hours but after that the crash is very likely IMO.

>> No.18750086
File: 119 KB, 720x767, Screenshot_20200429-144817_Finance.jpg [View same] [iqdb] [saucenao] [google]
18750086

>>18750043
Not common normally, common today.

Even fucking milk futures tanked because food logistic chain was fucked lol

>> No.18750198

>>18750086
Supply chain mess was being talked about on twitter months ago, too many 2nd and 3rd order effects to count because of corona. Even if the world re-opened tomorrow it'll be months until things are normal again. Volatility means money though, and there's plenty of opportunities.

>> No.18750230
File: 134 KB, 720x945, Screenshot_20200429-145914_Finance.jpg [View same] [iqdb] [saucenao] [google]
18750230

Just look at the money you could have made swing trading milk lol

>> No.18750804

That's some good spike action on opening. Might have been the best entry point

>> No.18751341

>>18750804
So put or call for oil in June and what value?

>> No.18751506

How exactly do I short oil? Is there an ETF that’s actually following oil prices?

>> No.18751638

>>18748735
What do you think about oil major stocks? Will they go down once again? I am talking XOM, Shell etc.

I know your thread is not about them but maybe you have some insight too.

Thank you

>> No.18751730

>>18750230
The milk market is ruthless anon, I’ve been chewed up and spat out

>> No.18751761

>>18751506
Becareful what you end up doing anon. I got absolutely rekt the other week as I didn’t understand the oil market

>> No.18751862

>>18750083
fyi 'spot' oil price on IG is actually a combination of the next 2 futures contract

not saying it won't work just as well, just know that they aren't offering the actual spot price (ie it's v unlikely it could go negative like WTI did last time)

>> No.18752228
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18752228

>>18751730

>> No.18753119

>>18751862
Okay, any suggestions for shorting this for a britbong? CFDs?

>> No.18753653

>>18751638
Well, 1 year forward they have eaten the small ones. Maybe debted, but still market leaders as now. Oil demand is going to stay low for a while and they are not making profit. But they'll be the survivors while many smaller ones will go down. I cannot say anything about stock performance.

>> No.18753703

>>18751506
If you need to ask, don't short oil.

>> No.18754692

I wonder if the 16.50$ oil was the best enrtry point

>> No.18754751

>acquirement
kys op

>> No.18754858

How are we doing bobos? I hope you managed to hit your shorts already. I doubt we get past Brent 23.60$ or WTI 16:60$ anymore.

>> No.18754919

Interesting market action today. Gilead results are actually really negative, despite the clickbait titles.

>> No.18755195

>>18754692
Down from here?

>> No.18755219

>>18748808
Global economies are not reopening, you fucking brainlet. It's a pump from companies expecting bleachbux to be directly injected into their respiratory system.

>> No.18755279

>>18749439
>recent oil price rise has been a short squeeze
Not really, it was just contracts rolling over to June which was in the $20s over may at sub $10. Once June contracts expire on may 20/21st it will likely drop again. This will keep happening until we reopen the country.

>> No.18755462

In this study of adult patients admitted to hospital for severe COVID-19, remdesivir was not associated with statistically significant clinical benefits.

https://www.thelancet.com/journals/lancet/article/PIIS0140-6736(20)31022-9/fulltext

The Remdesivir study was a failure despite what your mainstream media is telling you.

>> No.18755664

>>18755462
thats what they want you to think anon...

>> No.18755679

>>18748735
how about shorting CFDs?

>> No.18755842

>>18755664
because it’s true

>> No.18755968

>>18748735
I know the commodity is gonna tank. Peak oil storage is less than a month away and these retards think there's nothing but blue skies ahead. Let them lose all their money. Biz is fucking retail.

>> No.18756125

>>18754858
question is, should you short something that is most likely to climb some more in the following days just to plummet into oblivion in around 2 weeks.

>> No.18756366

Why would you short it if the contracts can be cash settled. Hedge funds are not going to be lumbered with gallons of oil.

>> No.18756887

>>18754919
That's because the remdesivir drug doesn't actually work like they say it does, for all they know those 50% of patients who recovered in the study were going to get better with or without the treatment.

>> No.18757084

>>18756125
> something that is most likely to climb some more in the following day

Well, the whole point of the thead was to say that cash settlement price is likely to be much lower than the actual future trading price right now. And that the short is valuable only in the very near term. Did you even read the thread?

"after that I'm long" did you miss this?


>>18756887
Yeah, if anything the study shows it to be counter productive.

>> No.18757426
File: 44 KB, 1295x881, dump.png [View same] [iqdb] [saucenao] [google]
18757426

Ladies and gentlemen. I declare that the dump has begun.

Expect some rebound though. We'll probably see the lows tomorrow evening.

>> No.18757580

>>18757426
Can you please answer some of the questions in the thread?

>> No.18757651

>>18757084
Fauci trying to pump it is a massive sell signal.

>>18757426
This crypto run should be heading the same way in the next 24 hours I'm thinking.

>> No.18757958

>>18757580
>Can you please answer some of the questions in the thread?
>Why would you short it if the contracts can be cash settled. Hedge funds are not going to be lumbered with gallons of oil.

Yes, Brent can be cash-settled as mentioned. However, this does not mean the price could not be detached from reality. As I said, no negative brent prices are coming. However, a fuckton of investors can still buy the futures without an intention to take delivery. Even without the delivery problem, the future price has a relation to reality, which in this case is the Brent Dated price (actual price the industry is paying).

I don't have exact data on hand, but normally only a minor part of buyers actually settle for cash. Last month future volume is double last year and probably this month is even more. A fuckton of new money bloating the futures, but the reality is the demand and supply. The current evidence we have shows that real physical price has been much less than the futures show.

Now again, we do not have public data on the real contracts from the past week. We can only say that for the whole duration of the month, futures have vastly exceeded reality. It is very possible that something has massively changed that we do not know of. But I find this unlikely.

Retail traders buy the future, but their cashflow does not directly lift the price of brent dated contracts which are what the settlement is based on. Of course there is correlation, but not 1 to 1. You can see how futures peaked at something like 36 USD levels in mid April, but dated price never was above 24 USD.

Any more unanswered questions?

>> No.18758106

Lol fuck this guy i'm still loading up on tankers and have been for the past 4 weeks.

get fucked niggers

>> No.18758260

>>18758106
Do you understand that low oil prices are positive for tankers?

Anyway, expect the tanker boom to be momentary.

>> No.18758978

>>18758260

its not about oil prices. i could give a fuck aboiut oil price, really. 1bbl could be 5$, it could be 50$, doesnt matter.

it's about demand destruction + oversupply. thats whats good for tankers, getting to charge those premiums for storage

>> No.18759440

>>18758260
tanker boom will last until Q3 if not further

>> No.18759540

>>18758106
What are you buying, smaller cap or the big boys?

>> No.18760015

>>18759540
I've got FRO, TNK, OSG, EURN

mainly big boys because revenue is based off of storage capacity, so bigger fleet = more storage = more revenue

>> No.18760171

>>18749557
Lol

>> No.18760285
File: 77 KB, 720x1280, mati-big-tits-2.jpg [View same] [iqdb] [saucenao] [google]
18760285

I'm an absolute noob. My instincts tell me but low, sell high, but whenever I delve deeper into this situation all I get is people saying
>muh futures
>muh not real prices
WTF. If the price of oil is low and I know its gonna come back then what's wrong with buying the fuck out of it!?

>> No.18760650

>>18760015
Yeah that makes sense

>> No.18761291

>>18760285
Same here. I am trying to eyefuck the shit out of this and keep doing some DCA in crypto aswell. I do believe in the theory that it is going to plummet again soon and that is when I will be buying.

Just get some dividends for some time and then sell it when its high.

>> No.18762421

>>18760285
>buy low, sell high
FML... I've been buying high and selling low ever since a buddy of mine sent me the Robinhood app. I'm a fucking Moran.