WTI weakness pauses

The equity carnage continues and macro economics numbers today continue to show europe and canada weakening. The Swiss are now having their own problem with Swiss banks and US authorities as pointed out by Mr FX. Crude prices are not spared as crude has lost over USD1 as we speak.


While SFOT do not put too much emphasis into his trading on weekly DOE data, the fact that Cushing has finally stopped building does suggest some sort of a peak in storage. Coupled with the fact that DOE will take in some 13mio barrels of crude over the next 2 months suggests that we have probably seen the lows in WTI-Brent spreads and WTI time spreads in the front end for now. The weak link again was distillates yesterday. With forward demand cover in distillates at multi year high, it seems unlikely we will have a product driven rally anytime soon, hence the range 30-60 probably will still hold for now in CO1. On volatility front, SFOT notes that WTI vol has been edging up over the past couple of days and it may be a telling sign the market is not comfortable in this range for now. He shall wait before adding to his length in COZ9.

Days forward cover