Near the Nymex close, fireworks have ignited inside the crude pit. Though crude and product markets were strong most of the day, early afternoon trade has resulted in some panic buying in the crude pit as we approach the close. As of this writing, nearby October crude futures - which expire today - are up more than $20.00/bbl, posting a daily high of $130.00. Meanwhile, the next out month for crude futures, November, is only up by $6.45/bb.
Apparently the hurricane related shut-ins and curtailments of the last few weeks left very little excess/tradable crude supply in the Cushing, OK (Nymex) delivery point. As such, those caught short the October futures have been forced to scramble to cover those contracts in the last minutes of trading today, causing the spread between the two front months to widen to over $12/bbl so far today.
“Today is the last trading day for October,” says Darren Dohme, RJ O’Brien trader. “The shorts got pinched because of the lack of deliverable supply in Cushing OK. Tomorrow you will see the market pick up where November left off at $108.92.”
Nearby Crude Continuation Chart:
QCLV8 122.60 18.05QCLX8 109.23 6.48QCLZ8 108.73 6.19QCLF9 108.30 5.73QCLG9 108.37 5.68QCLH9 109.46 6.61QCLJ9 109.05 6.03QCLK9 106.30 3.11QCLM9 109.98 6.62QCLN9 110.09 6.57
Dave Chatterton
RJO Financial LLC
(217) 351-9030 Office
dave@powerlinepetroleum.com
