NYMEX Light Crude

[Helenqu]

This is a brief summary of the reading I have been doing around the NYMEX contract. I’m not looking to trade it as yet and if I eventually do, it will be via D4F. I’d be interested in others comments, particularly in relation to anything vital that I may have missed

History of Oil Prices

Highly volatile, price changes can be very rapid. Prices are normally quoted per barrel although the futures contract itself is for 1000 barrels. (1000 barrels is small beer, tankers can carry 1 million barrels worth at a time). The post Second World War price of oil was around $3 a barrel.
OPEC (Organisation of Petroleum Exporting Countries) was formed in 1960 with five members, Kuwait, Saudi Arabia, Iran, Iraq and Venezuela. Later Qatar, Indonesia, Libya, United Arab Emirates, Algeria and Nigeria joined. By the early 1970s OPEC had real power and were able to impose an oil embargo on the US and other countries supporting Israel during the Yom Kippur War, this sent the price of oil up to $12 a barrel. Further price rises occurred during the Iran Iraq war in 1979/80 and it rose to $35 a barrel in 1981. OPEC tried to stabilise prices but in 1985 the Saudis decided that they were tired of under producing whilst other OPEC members produced what they liked. This action led the price of oil to drop to $10 a barrel. Attempts were made again to stabilise the price at $18 a barrel but it proved difficult to maintain. There was a price rise to $25 in 1990 with the Iraqi invasion of Kuwait but once that was resolved the price fell back again and declined until 1994 when prices rose because of a booming economy in the East and the US, production was increased to keep prices stable once again but the turndown in the Japanese economy from 1997 onwards led to a drop in prices. In 1999 OPEC made an effort to reduce the price decline and cut production, by mid 2000 the price was up to almost $40 a barrel. The price again fell back to around the $25 level until this year with the Iraq War uncertainties it went over $30 a barrel again.

A chart of the historical oil prices and key events is seen below

Current NYMEX Light Crude Price Chart

Details of the Futures Contract

Units Quoted $ per barrel
Contract Size – 1000 barrels
Minimum tick - $0.01 barrel
Tick value - $10
Margins - $5400 per contract
Trading hours – Traded open outcry 10am – 2-30pm US time. Also traded electronically virtually continuously via NYMEX ACCESS electronic exchange.
Monthly contracts, near month is the contract traded (i.e. July in June)

Typical price movement.
Here are price movements over the past few days. 0.71, 0.11, 0.53, 0.86, 0,85. So for the futures contract movements of $800 a day pretty commonplace.

Spreadbetting

Offered between 20-15 and 14-00 Monday to Friday.
Spread 0.06
£1 per 0,01 price movement.
Price charts on D4F are fairly reasonable.

Summary

A very liquid contract with plenty of movement. Market very susceptible to political and world event influences, if you are going to trade this you need to be by your screen May potentially be a good alternative to index trading if the summer months are quiet.

Further Reading:


http://www.britefutures.com/

http://www.oilnergy.com/1cashpet.htm#brent

http://www.castletrading.com/charts.htm

http://www.futuresource.com/charts/charts.asp?sym=CLN03

 

[peter carlin]

NYMEX Contract

we focus almost exclusively on the NYMEX oil markets on

www.theoiltrader.com

There is a free 1-day trial.

 

[tradesmart]

The stock markets seem to be living in fear of the volatile expensive black stuff at the moment, and looking at the chart, I’m wondering if it’s poised for a retest of $49+ – possibly ‘fuelled’ by Ivan’s deliberations in the Gulf……

"With Hurricane Ivan bearing down on the Gulf of Mexico's coast, at least two major energy companies on Tuesday began shutting down their petroleum refineries in the area"

ChevronTexaco said that its facility in Pascagoula, Miss., which processes 325,000 barrels of crude a day, would be closed by morning.

ExxonMobil began shutting down its refinery in Chalmette, La., a spokeswoman said. The facility processes 92,000 barrels of heavy crude from Venezuela daily

apart from the refineries, there are quite a few oil rigs in the area...

and there's an OPEC meeting this week.......

............

 

[tradesmart]

A potentially bullish breakout from the triangle consolidation today, and that $3.80 target to equal the recent all time high is a bit more than coincidence……..

 

[bgold]

A potentially bullish breakout from the triangle consolidation today, and that $3.80 target to equal the recent all time high is a bit more than coincidence……..

As so often before, your observation was spot on!! Todays' rally takes CL X very near your target at $49.- Considering momemntum it could easily contunue into $50-51 range.

Congrats, hope you traded the call? I'm afraid, I didn't.

Going forward it seems that momentum in Crude is weakening. This push up might be a wave 5. End of this bull run in sight?

 

[tradesmart]

Congrats, hope you traded the call? I'm afraid, I didn't.

Hi bgold!

I’ve been running a small long from $42.50……..

Seemed to be a fairly safe bet with the current huge speculation in oil……

I’ve been reading reports about investment banks buying millions of barrels and even oilfields…..

Where will it end……..?!..........

 

[JumpOff]

Helen,
If you are interested in fundamental or historical analysis of oil, you may want to take an afternoon to read up on the theory of "peak oil." The main proponent of this theory is colin somone (can't remember his last name). He's got the credentials to make a splash. I don't know enought about the science to give an opinion, but here is the basic argument:

The folks in the Peak Oil camp say geologists are paid to find the 'easiest to extract oil' first and they have. All oil fields gush at first and then decline over a predictable curve. Drilling new wells into old fields eventually becomes unprofitable and the field is abandoned. A guy named Hubbert accurately predicted the peak and decline of US produced oil back in the 60's - no one has yet refuted his work. He was aware of the possibility of extracting oil through more tedious methods than just pumping it, but he said those methods wouldn't give a decent yield/effort ratio on a sustainable basis. He said back in the 60's that world oil production would be peaking now in the next 5-10 years - but what he could not have foreseen was the incredible demand coming on line from the developing world. The folks in this camp claim all these fundamentals will come together to make $50/ barrel look like an incredible bargain. They predict wars in the gulf states and prices upwards of $200/barrel.

The other camp say that people who believe that oil comes from compressed dinosaurs and bog ferns (the traditional theory) are 'Flat Earthers' who can't admit that their theories are pathetically outdated and don't fit our models of current knowledge. They contend that oil and gas are produced in inconceivable quantities deep with the earth and seep up through fissures in the Earth's mantle into puddles near the surface that we call "oil fields." Some of them claim that Russia has figured out how to drill ultra deep wells to obtain unlimited quantities of the stuff, and that supply will not be an issue when all other countries start to exploit the same technologies.

Neither of these camps deal with the issue that burning fossil fuels produces more than enough CO2 to tip the balance in our atmosphere. So my prediction is high volatility over the next decade while the peakoil/ultradeep/enviroregulation tribes fight it out.

Google is your friend.

Should make for good trading!

JO

 

[josbarr]

Natural gas will be the primary energy resource of the future and the tiny nation of Qatar is uniquely positioned to provide much of the supply, says the emir of Qatar, Sheikh Hamad bin Khalifa Al-Thani.


Al-Thani talked about energy, education and Al-Jazeera on Tuesday with the Houston Chronicle's editorial board.

Qatar, a small Persian Gulf country bordering Saudi Arabia, is a member of the Organization of the Petroleum Exporting Countries and pumps 800,000 barrels of oil out of the ground each day. But the country also sits atop the world's third-largest natural gas reserves, ranking just behind Russia and Iran.


Hopes for global energy hub
Al-Thani envisions Qatar as the future global hub of both the liquefied natural gas and gas-to-liquids industries. To make that happen, he said, the country had to open up to foreign investment and bring some transparency to its deal-making process — rare in most Middle Eastern countries.

"If you came to Qatar eight years ago, you would have lots of problems," he said. "Now, no sheiks, no princes. You go direct to Qatar Petroleum."

In the past couple of years, the state-run oil company has signed a flurry of LNG and gas-to-liquids deals with Western energy companies including Exxon Mobil, Royal Dutch/Shell, ConocoPhillips and ChevronTexaco.

The Emir's wife, Sheikha Mozah Bint Nasser Abdullah Al-Misnad, leads the country's education reform efforts, and talked up the collaboration between Qatar and Texas A&M University, which opened an engineering branch in Qatar.

She also emphasized that Qataris voted on a new constitution in April 2003, which cemented women's right to vote, and she expects progress toward full democracy.

"I expect that when the people are educated, they will not stand for anything less," she said.


Country takes criticism
Qatar has been criticized by Middle Eastern neighbors for its elections and openness to Western capital. And Arab countries and the United States are often furious about what they see on Al-Jazeera, the Arab-language television network that Al-Thani founded in 1996.

U.S. officials have criticized the network as being virulently anti-Western and Arab countries object to freewheeling style that can be critical.

Al-Thani admitted Al-Jazeera's coverage is not perfect, and says one good step toward improving the network will be an editorial board put into place by year's end

 

[bgold]

Unlike Jumpoff's post, there doesnot seem to be any good reason to post this news clip about Qatar into this thread. It ain't no message traders can use for assessing set-ups, entries or exits. Reviewing youtr earlier posts, it seems you are doing too much copy -paste. Are you a broker? Try to be a little original and in stead do some thinking for yourself.
So please do keep these to yourself.
Many thanks

Natural gas will be the primary energy resource of the future and the tiny nation of Qatar is uniquely positioned to provide much of the supply, says the emir of Qatar, Sheikh Hamad bin Khalifa Al-Thani.


Al-Thani talked about energy, education and Al-Jazeera on Tuesday with the Houston Chronicle's editorial board.

Qatar, a small Persian Gulf country bordering Saudi Arabia, is a member of the Organization of the Petroleum Exporting Countries and pumps 800,000 barrels of oil out of the ground each day. But the country also sits atop the world's third-largest natural gas reserves, ranking just behind Russia and Iran.


Hopes for global energy hub
Al-Thani envisions Qatar as the future global hub of both the liquefied natural gas and gas-to-liquids industries. To make that happen, he said, the country had to open up to foreign investment and bring some transparency to its deal-making process — rare in most Middle Eastern countries.

"If you came to Qatar eight years ago, you would have lots of problems," he said. "Now, no sheiks, no princes. You go direct to Qatar Petroleum."

In the past couple of years, the state-run oil company has signed a flurry of LNG and gas-to-liquids deals with Western energy companies including Exxon Mobil, Royal Dutch/Shell, ConocoPhillips and ChevronTexaco.

The Emir's wife, Sheikha Mozah Bint Nasser Abdullah Al-Misnad, leads the country's education reform efforts, and talked up the collaboration between Qatar and Texas A&M University, which opened an engineering branch in Qatar.

She also emphasized that Qataris voted on a new constitution in April 2003, which cemented women's right to vote, and she expects progress toward full democracy.

"I expect that when the people are educated, they will not stand for anything less," she said.


Country takes criticism
Qatar has been criticized by Middle Eastern neighbors for its elections and openness to Western capital. And Arab countries and the United States are often furious about what they see on Al-Jazeera, the Arab-language television network that Al-Thani founded in 1996.

U.S. officials have criticized the network as being virulently anti-Western and Arab countries object to freewheeling style that can be critical.

Al-Thani admitted Al-Jazeera's coverage is not perfect, and says one good step toward improving the network will be an editorial board put into place by year's end

 

[-oo0(GoldTrader)]

crude

Hybrid Thread

Spread Um’?

Don't have nightmares!

 

[saladdays]

NYMEX crude is currently $62.31. Still don't believe in peak oil? It's likely that light sweet oil has peaked and so the only way is up. The economy? Down!

 

[Naz]

I always have a chart of NYMEX crude on hand somewhere.

 

[saladdays]

I always have a chart of NYMEX crude on hand somewhere.

So do I.

http://stockcharts.com/def/servlet/SC.web?c=$WTIC,uu[w,a]dallyyay[pb50!b200][vc60]

The chart shows the price over the last 30 months. The red line is the 200DMA. Look how it's increased 74% (from $30 to $52) in two years.

Get ready for a suprise.

 

[daps]

Hi...,

I'm looking for EOD prices (last 3-4 months) for US light crude and Brent, can anyone suggest where I can get the information. Also any website that I can put both the products onto one chart.

Thanks.

 

[daps]

Hi...,

Thanks for the information people. However, im unable to put both products onto one chart.? Can anyone suggest which to use. Or any website I can get a list of the closing prices for Brent and Light Crude.

Regards

Daps

 

[Peter]

Does anyone know the exact dates for Crude oils past all time highs.

Mainly during the Iraq / Iran war between somewhere between 1978 to
1981

Apparently the article below says Crude hit $35 a barrel in 1981..
This may have been the equivalent of around $70 a barrel today if
adjusted for inflation... I Think it may have been in Jan 1981..


I see it was also very high in 1869... 136 yrs ago

http://www.wtrg.com/prices.htm


Iraq invaded Iran in September, 1980 by November the combined
production of both countries was only a million barrels per day and
6.5 million barrels per day less than a year before. Worldwide crude
oil production was 10 percent lower than in 1979.

The combination of the Iranian revolution and the Iraq/Iran War
resulted in crude oil prices more than doubling from $14 in 1978 to
$35 per barrel in 1981. Twenty-five years later Iran's production is
only two-thirds of the level reached under the government of Reza
Pahlavi the former Shah of Iran.

 

[jimbo57]

i think you will find that Iraq invaded Iran in September 1990, not 1980. The highs in the prompt month were made last week at $68. The highs in the Gulf War of 1990/91 were made on the morning of Jan16th 1991 at $41.15 in the over the counter market (no Access in those days) as bombs started raining down on Baghdad. 12 hours later as I recall the price was about 12$ lower.

 

[Peter]

Hi Jimbo

Click on the link and note there was a higher high shown on the long term chart that occurred around 1979 to 1981.

http://www.wtrg.com/prices.htm



Im Led to believe if adjusted for inflation that the 1980 top around $35 was higher than in 1991.ie at $41

This was a time of war between Iraq and Iran,,

1990 was when the USA invaded Iraq.. IM NOT sure if Iraq was also at war with Iran, but they invaded Kuwait if i recall which started the USA V Iraq conflict..


I did a search for the top made in the 1860s

I found 2 articles on webpages that suggested there was a all time high made in 1864 ( NOT 1869 as i wrote in last msg ) that when adjusted for inflation would have been around $86 by todays standards..

 

[Peter]

just found this to confirm 1864 was a possible inflation adjusted all time high.

Although it was actually $92 instead of $86 based on 2004 dollar terms which may be dfifferent now in 2005...


In inflation-adjusted terms, a barrel of oil is cheaper than it was in 1980, when it cost $81 in today's money. (In 1864 newly discovered oil hit a giddy $8 a barrel-- $92 in 2004 dollars.)
A weaker U.S. dollar has raised the dollar price of oil. A 10% reduction in the value of the dollar against the currencies of other oil-consuming countries has led to a 7.5 percent increase in the dollar price of oil, according to the Dallas Fed. The euro price of oil closely tracked the dollar price until mid-2002 but in mid-May was about the same as it was in early 2002.
Hedge funds have made big bets that oil prices will continue to rise because of the supply/demand/stocks imbalance and continuing political uncertainty in the Middle East. OPEC officials say this speculation accounts for up to 20% of the recent oil price.

 

[DanielLambert]

Iran/Iraq War ended in 1990 , so I guess Saddam got bored and targeted Kuwait instead.....



Peter you are right about Iraq invading Iran in September 1980.

http://www.onwar.com/aced/chrono/c1900s/yr80/firaniraq1980.htm