Commercial short sales on the market for crude oil


The United States is full of oil produced domestically. crude oil inventories in the United States reached a 26-year high. Gosh, just last year, North Dakota passed Ecuador's production, and Ecuador with & # 39; is a member of OPEC. In addition, the United States planned to get the crown as the world's largest oil producer Saudi Arabia already in 2020. Questions that arise with & # 39 are two-fold. "Why is the price of oil fell and why gas prices are still so high." The answer is simple: politics and logistics.

Forty years ago, the Law of the Energy Policy and Conservation. The idea was for the most part is to ban the export of crude oil, thus moving away from the production obtained in OPEC, and especially to the production on the basis of Texas during the oil crisis of the 1970s and OPEC embargo. Although the intention at the time was noble, it is clear that the global energy landscape has changed. We are fast approaching the point of energy independence. Our products have already eclipse imports at a weekly level regularly. In fact, the production of growth here in the US, helped to level the global production decline in each of the last three years.

Here comes a breakthrough in the Energy Policy Act, or saved. While crude oil itself can not be exported, oil can. Thus, oil refining companies have access to both domestic and world markets over the past 40 years, whereas in fact put drilling ties outdated policy. Oil rigs, which are retained by the legislation, the importance of oil saw a decline in the US compared with the world market, as domestic supplies increased. Processors used household situation fully. They buy cheap domestic oil and sell refined oil products at higher prices on the world market. clothing for the evaluation of the petroleum refining industry.

Ironically, change outdated legislation may not even need to align the prices. Initial adhesive is confined to the Midwest. Canadian oil flows through the Keystone pipeline, along with North Dakota and Montana. All ends in Cushing, Oklahoma. The expansion of the gas pipeline will allow to deliver this light sweet crude materials a processing plant that will balance the difference between the east and west coasts in comparison with gas prices in the Midwest. Pipelines, such as the gas pipeline project along the Arabian Gulf, X & # 39; yustanski side project and, obviously, the expansion of Keystone is to double the processing power of the Persian floor.

Alarmists use the previous example to illustrate that gas prices will rise "on all American heart." However, it is easy to see how the population is changing from the American heart to the coast. Lifting of the ban on exports, will certainly lower the price of oil Brent, which can be of great benefit to coastal refineries, which already import and process more heavy crude brand Brent, as well as their total. The answer is simple: it would create a more efficient world market and an efficient market driving prices down for all those involved. Thus, the refineries will be the loudest voice of protest.

Built-in bias in the domestic market of crude oil, which increases Fracking boom in the industry, it creates a kind of set of commercial bias. Fear of the crude oil market is always measured by unexpected shocks. This can be measured by blocking the purchase of commercial traders (processor) in future deliveries. Commercial traders were huge buyers at a rally of 2007-2008 and were also the biggest sellers at the top. Thus, it is worth noting that their current status & # 39 is the least bullish since August 2005. We use this bias to trade short part dyskontavanaga WTI contract for many years. You can see our typical configuration diagrams for commercial short sales in WTI crude here.