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Darrin Haugan

Speculators Challenge Historic Long Positioning as Global Inventories Fall

Speculative positioning in NYMEX WTI futures is nearing historic levels as net position for Managed Money contracts climbs to 432,650 and the hedge fund ratio jumps to 15.13. Net positioning is firmly above its high of 405,328 made on 2/21/2017 and the hedge fund ratio is 0.07 away from its high of 15.20 formed on …

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API Estimates Push Crude Higher; US Dollar Tumbles on Reports China May Slow or Halt US Treasury Purchases

ULSD futures traded higher overnight after the API’s release of inventory estimates yesterday at 4:30 pm with prices climbing as high as $2.0844. ULSD’s rally seems overly dependent on crude oil’s price action given the API’s estimates. The American Petroleum Institute estimated crude draws for the week ending 1/5/2018 of -11.19 million while the inventory …

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EIA Weekly Petroleum Status Report 12/29/2017

Crude oil stocks show consistent draws while distillate and gasoline continue to post builds. For the week ending 12/29/2017, crude oil stocks excluding the strategic petroleum reserve declined by 7.419 million barrels to 424.463 million barrels. Distillate fuel oil stocks climbed 8.899 million to 138.834 million barrels. Total Gasoline stocks rose 4.813 million to 233.187 …

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Oil Trades Higher Throughout Iranian Protests

Anti-government protests began in Iran last Thursday with tens of thousands of citizens estimated to have participated. What started as peaceful protests against rising food prices and a poor economy quickly devolved into challenging to ruling Iranian government. At least 20 casualties have been reported and the Iranian Revolutionary Guard was dispatched to three provinces …

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Crack Spread Update: December 2017

Our crack spread estimates are constructed through intercommodity analysis by regressing the underlying commodities against other relevant instruments. For closing values on 12/29/2017 The 3-2-1 crack spread increased to $19.01 and is $2.84 above its estimated intercommodity fair value at $16.18. The ULSD crack spread increased to $26.75 and $5.34 above its estimated intercommodity fair …

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Empirical Models Suggest Higher Prices; Risk Reversal Threat Remains High

Long-term global supply & demand models suggest current oil prices are underperforming historical values. Regression analysis of 6-month average supply-demand differentials versus WTI futures prices since 2005 have oil near $80 per barrel. An intercommodity model regressing oil prices to correlated commodities also suggests higher prices, although to a lesser extent. As of December 31, …

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