Messy crude price action and the return leg of UCL

Crude oil prices have settled down a little today, after 2 days of brutal moves in a single WTI April 09 contract. While SFOT hears nothing to suggest any fundamental reason to be aggressively buying J9 WTI, the fact that every spread traders would like to be short JK spread is likely to point to stop losses in the spread and possibly more to come if we break higher on the one spread which is completely disconnected to the rest of the market. Evidence still suggest stocks in cushing remains high however, and a recent 1mio bbl draw in cushing cannot explain a usd $4 rally in a small time spread. The randomness of the front WTI future is even more pronounced when we compare it to Brent. The past few days have seen Brent futures, which is a more global crude than WTI, trade like it is going out of fashion. The low realized vol in Brent has made being short the strangle in M9 Brent pay off these past trading days and SFOT continues to hold on to the strangle.

Coming up to the Opec meeting this weekend, the fact that Saudis would like to see more compliance before discussing more cuts are definitely sending a signal to the market that production cut is far from a done deal. It seems they now have a massive problem of balancing fast falling demand and crude prices they would like to see. However, they must draw relief from the fact that floating storage are in the process of clearing out, while front line crude prices have been stabilizing. Without further news nor fresh intelligence, SFOT now thinks they will not make new production cut but employ a wait and see attitude.(shift of views from just 2 weeks ago). I guess this would mean flat price in Brent to stay within range post OPEC meeting next week while prompt WTI futures will go about its own monkey business.

The champions league continues tonight.... my money is on at least 1 english team to be knocked out this week.....and the only team NOT with an advantage heading into the second leg is of course Man Utd. Playing Italian teams away though has never been easy and Chelsea+Arsenal are in danger as well. Liverpool's seaon might end this week if they do not qualify today and then beat Man Utd at old trafford. Whatever it is, SFOT is ready for lots of football this week while crude(brent) prices falls asleep.