Lot's of stuff breaking in the energy markets. I don't post often, but I have been alerting this board that the Supply/Demand (S&D) published by the DOE/EIA every week has been jacked up for months, especially when you add in that EIA didn't publish 2 reports in July (first time ever to not publish and did it 2X). Stuff is getting more vocal and more folks are noticing. (BSG I know you were not real happy about the NatGas reversal or something to that regard, frankly I'm glad you didn't get into the trade. Right now, if you aren't Long, forget it. All the numbers are BS. Going short in this environment is not the "chance" you want to take,...or is it?) I can write/type for days but by the time all this is over, I believe it's going to take Saudi, Israel and Putin to save America from Brandon...ironic. I copied & pasted some info below from another site. This info is spot on.
"There are quite a few analysts speaking out. You may have seen the article released 4 hrs ago...."Is Dodgy Demand Data Driving Oil Prices Lower?". The article has some old quotes from a Piper Sandler analyst and Valero's CEO that were in the author's earlier article about "dodgy data". The first dodgy data article was written shortly after EIA June and July "suspect inventory reports" were released. Bullet point #3 in todays article is spot on:
- Open interest in crude futures and options contracts has fallen to a seven-year low.
- OPEC ministers and some analysts believe that the veracity of oil market price signals have been compromised.
- Some pundits are even accusing the Biden administration of fabricating low gas demand data in a bid to hammer oil prices."
WTI is being manipulated. In most Futures markets, when the Cash physical market has lost connection to the Futures market a Large Commercial will will send notice to take delivery on a Futures Long. Basically, if Futures and Cash are so disconnected, the Commercial is saying, "Hey Futures!, if it's so cheap, I'll take all you got. Give it to me, because I can't source it as cheaply in the cash market". Apparently, WTI doesn't have a Large Commercial willing to take a stand to bring the markets back in sync. Open Interest is at a 7 year low as noted above. That's indicating traders know it's a BS manipulation by someone(s).
Saudi from what I gather is not a paper player, but they hold the keys today. Saudi just cuts production back and reports it. Tighten the market up on physical and drive up the cash price and Futures be damned. <This is happening now. Saudi has noted the Cash and Futures disconnect last week. Thereafter, WTI & Brent moved up the next day. (Amazing how that happens) However, WTI & Brent have come back down. Futures do not represent the reality today based on the S&D. EIA shows a draw again this week after the SPR release is removed. If you want to short NatGas or Crude, it's your call. I wouldn't, no matter what your gut or judgement is telling you. This is more rigged than normal. Someone is going to break and squeal or Saudi will just turn the crude valve closer to off. Putin is going to turn off the NatGas valve to Germany this winter. Putin is flaring unsold gas now but they cant sustain production without parts and sanctions are keeping parts out. Either way for Putin, no production or turning off the valve, German's are going to get cold and just maybe German's decide Green Energy really is a hoax.
Energy Futures and Indices indicate one thing; however, the S&D is the bible. Trade accordingly.
And,...in my former profession we always told a Short in trying contractual times, "He who sells what isn't hissin, either buys it in or goes to prison". Nasty stuff when not only your tit is in the ringer but somehow your ass manages to be in there too.
GLTA & PTLA