• 2 hours Renewables in US Set for Fast Growth
  • 4 minutes Get First Access To The Oilprice App!
  • 13 minutes Oil prices forecast
  • 24 mins Chinese FDI in U.S. Drops 90%: America's Clueless Tech Entrepreneurs
  • 11 hours Oceans "Under Fire" Of Plastic Trash
  • 15 hours Is Natural Gas Renewable? I say yes it is.
  • 11 hours Japanese Refiners Load First Iran Oil Cargo Since U.S. Sanctions
  • 21 hours Blame Oil Price or EVs for Car Market Crash? Auto Recession Has Started
  • 2 hours Socialists want to exorcise the O&G demon by 2030
  • 17 hours Making Fun of EV Owners: ICE-ing Trend?
  • 8 mins Good Marriage And Bad Divroce: Germany's Merkel Wants Britain and EU To Divorce On Good Terms
  • 16 hours Emissions from wear of brakes and tyres likely to be higher in supposedly clean vehicles, experts warn
  • 7 hours Cheermongering about O&G in 2019
  • 7 hours North Sea Rocks Could Store Months Of Renewable Energy
  • 2 hours *Happy Dance* ... U.S. Shale Oil Slowdown
  • 1 day Europe Slipping into Recession?
  • 1 day Algorithms Taking Over Oil Fields
Jim Hyerczyk

Jim Hyerczyk

Fundamental and technical analyst with 30 years experience.

More Info

Market Contango Leads To A Dangerous Game In Oil

Crude Oil Futures

Sellers hit April Crude Oil futures for a sixth straight day on February 11, driving the market to nearly a fresh 12-year low. Huge supply and new forecasts calling for $20.00 crude over the near-term then a range bound trade into the end of the year were two catalysts cited by traders for the sell-off.

Traders are already pricing in more supply at the Cushing, Oklahoma delivery hub for next week’s inventories report. As of February 5, crude inventories in Cushing had reached an all-time high a little short of 65 million barrels, according to the U.S. Energy Information Administration. Private forecaster, Genscape, is already predicting a build of almost 425,000 barrels for the week to February 9.

Activity at the exchange also suggests that prices are headed lower over the near-term with most of the action taking place in the $25 put market. The chart indicates that given the current level of volatility in the market, it may just be a matter of days before these puts will be “in the money”. To those new to the futures markets, a put is an option contract giving the owner the right, but not the obligation, to sell crude oil at a specified price within a specified time. So this means that traders are so bearish that they are buying the right to sell crude oil under the current market price.

The thought is also the theme in the futures market where the spread between the March and April contracts in U.S. crude widened…

To read the full article

Please sign up and become a premium OilPrice.com member to gain access to read the full article.

RegisterLogin



Oilprice - The No. 1 Source for Oil & Energy News