Archive for the ‘trading’ Category

Commodities trading: not for the faint-hearted

By Melanie Wold | May 14, 2013 12:01 AM Comments (0)

Once the darling of hedge funds, commodities are now looking like a poisoned chalice. Last year, hedge funds such as BlueGold, which specialized in crude oil; Centaurus, in natural gas; and Fortress Commodities, across all raw materials, shut down. Several commodities fund of funds also closed last year after clients fled.

Commodities trading, it seems – and in particular oil – is not for the faint of heart. The field is littered with failed ventures and prison sentences.

International sanctions on exporting countries such as Iran can make trading crude an even more dangerous game. On May 9, the US Treasury said it was penalizing Sambouk Shipping for contravening these sanctions. Sambouk is allegedly associated with Dimitris Cambis, who, along with a network of front companies, was executing ship-to-ship transfers of Iranian oil to obscure its origin.

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ICYMI: Biden and Keystone, US oil import balance, Brent/WTI

By John Kingston | May 10, 2013 05:41 PM Comments (0)

A few random things at the end of the week:

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Making money in Hawaii’s oil market is like pushing a boulder up a volcano

By Jeffrey Bair | May 10, 2013 12:43 PM Comments (2)

They like to say around the Platts office in Houston that California is an island.

An economic island, that is. The kind where the spot prices of gasoline and other refined fuels are insulated from the bob and weave of trades in the rest of the United States.

It’s an interesting analogy. But consider how fuel economics are affecting a real-live island right now: Oahu.

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Petrodollars: Tighter Brent-WTI spread raises new challenges for refiners

By News Desk | May 6, 2013 12:01 AM Comments (1)

The wide Brent-WTI spread has meant enormous profits for US refiners lucky enough to take advantage of it. But it’s not as wide now, and that is bringing a new set of issues for those same companies. Janet McGurty looks at the issue in this week’s Oilgram News column, Petrodollars.

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The commodity super cycle: Citi declares it has come to an end

By John Kingston | April 13, 2013 04:31 PM Comments (4)

On a day when gold plummeted and oil dropped right alongside it, Citi Research was throwing dirt on the grave of the commodity super cycle.

The then-Goldman Sachs Commodity Index hit its bottom in early 1999 (it’s now the Standard & Poor’s GSCI), and the talk of a new commodity super cycle began soon after that. You’d hear frequently that the super cycle was going to last 15 years, or maybe 20. So it’s about 14 years old, and Citi Research’s Ed Morse, in a report released Friday, says it’s breathing its last. (Full disclosure: Standard & Poor’s, like Platts, are both owned by McGraw-Hill Financial.)

“The second quarter should provide another affirmation that the so-called commodity supercycle has finally ended and should usher in the first ‘normal’ year in over a decade in which, broadly, commodity prices end the year lower than when the year started,” Morse said in his report. The super cycle’s end has been building for several years, Morse said, noting a “Supercyle Funeral” that began in 2011. This year would be the “afterparty.”

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Recent crude-carrying train derailments in US heat up crude by rail safety debate

By Bridget Hunsucker | March 29, 2013 06:16 PM Comments (0)

Two trains carrying crude oil derailed in the US this month, making headlines that garnered more attention to a recent debate over the in-vogue shipping method’s environmental impact.

The popularity of crude by rail shipments has opponents of major proposed crude pipeline projects (like Transcanada’s Keystone XL) asking the question: is rail transport safe?

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Heating oil’s future doesn’t look so hot in the US

By Matthew Kohlman and Joshua Brown | March 27, 2013 03:26 PM Comments (0)

Heating oil as we know it is slowly but surely vanishing.

CME Group will officially switch the basis of the NYMEX heating oil futures contract from actual heating oil to ultra low sulfur diesel on April 1, a move signifying the beginning of the end for the once-dominant fuel.

The NYMEX switch was prompted largely by increasingly strict sulfur maximums in the US Northeast states, which are the largest consumers of heating oil.

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Thoughts from Boca: not a lot of hostility on display

By Christopher Tremulis | March 15, 2013 03:30 PM Comments (0)

Three long days and very late nights with 1,004 registrants at the annual Futures Industry Association Conference in Boca Raton, Florida, certainly had its moments of industry optimism and gossip. Exchange executives and regulators were in abundance, but although being tasked with finding energy and regulatory news, it would have been easier to work for a gossip website.

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More on RINs and ethanol: the RFA fires back

By John Kingston | March 12, 2013 01:41 PM Comments (0)

Bob Dineen, the head of the Renewable Fuels Association, is one of the energy industry’s most notable success stories in Washington. Outside of losing the blender’s ethanol credit a few years ago, which by the end the RFA had stopped resisting anyway, the ethanol industry has been a consistent winner in the game of politics. I was in Washington in 2006 when a long-time observer of the Washington scene noted with a sense of amazement that President Bush was going to be speaking to an upcoming RFA summit, and Bob Dineen was going to introduce him. That’s clout.

So it was always going to be interesting waiting to see just what Dineen said about the climbing value of RINs. (They’re falling today). Last Thursday, he finally made his case on the RFA’s website.

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A sea change for US jet fuel: record net exports for 2012

By Matt Kohlman | March 5, 2013 09:43 AM Comments (0)

Think the jets to Europe and Latin America are packed? Try the ships carrying jet fuel.

 The idling of a major Caribbean refinery last year helped speed along a net export trend for US jet fuel, with a record amount shipped out of the US in 2012. The reversal of historic net imports happened despite events that would normally make one think the US would be a heavy importer: major refinery issues on the West Coast and Hurricane Sandy on the East Coast.

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