asr: see Goldman $30 short-term forecast (see 2 posts below) got wrong as goldman did not expect 5% cut from OPEC as opposed to announced 2.5%
Jan. 23 (Bloomberg) -- OPEC will cut supplies by about 5 percent this month as the group implements production constraints announced in December, according to preliminary estimates from consultant PetroLogistics Ltd.
Oil supply from 11 members of the Organization of Petroleum Exporting Countries subject to quotas will average 26.15 million barrels a day in January, down from 27.65 million barrels a day, Conrad Gerber, the founder of PetroLogistics, said today by telephone from Geneva. From this month, members have a production quota of 24.845 million barrels a day. Iraq has no quota.
Saudi Arabia, the group’s largest member, led the cuts, lowering supply to 8.05 million barrels a day in January from 8.6 million a day last month, Gerber said. The kingdom’s new total is in line with its Jan. 1 quota.
“The latest OPEC supply data gives me confidence we’ll see a drawdown in inventories globally,” said Gareth Lewis-Davies, an analyst at Dresdner Kleinwort Group Ltd. in London. “The amount of OPEC supply reduction far exceeds the drop in demand.”
OPEC, responsible for about 41 percent of the world’s oil, agreed a record supply reduction at its last meeting on Dec. 17 as demand and prices collapsed. Crude futures traded around $43 a barrel in New York today, having lost more than $100 a barrel from an all-time high reached in July.
---------
Oil May Rise as OPEC Members Cut Output, Survey Shows (Update1)
Saudi Arabia, OPEC’s biggest producer, has decided to cut output by 300,000 barrels a day below its OPEC quota to prop up prices, Algerian Oil Minister Chakib Khelil said on Jan. 21, according to the state-run newspaper El Moudjahid yesterday. The spread between front-month contracts and later months declined this week, reducing the incentive to stockpile crude oil.
“With the recent gains in price and the flattening out of the forward curve, we may be seeing the first evidence that the OPEC production cuts are having an impact on the crude oil market,” said Tim Evans, energy analyst with Citi Futures Perspective in New York. “If so, this could be the start of an ongoing price recovery.”
New production targets for OPEC members came into effect Jan. 1 following a Dec. 17 meeting in Oran, Algeria. The 12- member group needs to make the deepest supply cuts in its history to comply with the revised quotas. The group’s next meeting is scheduled for March 15.
The price for oil for delivery in April is $2.74 higher than for March, down from a $4.45 premium on Jan. 16. This structure, in which the subsequent month’s price is higher than the one before it, is known as contango.
The oil survey has correctly predicted the direction of futures 48 percent of the time since its start in April 2004.
Bloomberg’s survey of oil analysts and traders, conducted
each Thursday, asks for an assessment of whether crude oil
futures are likely to rise, fall or remain neutral in the coming
week. The results were:
RISE NEUTRAL FALL
13 6 11
Saturday, January 24, 2009
JPMorgan Cuts 2009 Gas Forecast 5.2% on Weak Economy (Update2)
Jan. 23 (Bloomberg) -- JPMorgan Chase & Co. cut its 2009 price outlook for natural gas futures by 5.2 percent as a deepening recession in the U.S., Europe and Asia slices demand.
Gas will average $5.69 per million British thermal units on the New York Mercantile Exchange this year, down from a forecast of $6 on Dec. 17, according to a report from Scott Speaker, JPMorgan’s natural gas strategist in New York. Prices will rebound to average $6.63 in 2010.
“It has become clearer in the past month that severe manufacturing weakness will have an impact on natural gas demand that goes beyond a brief hiccup or temporary condition simply needing some producer-driven tightening,” Speaker said in the report.
Natural gas for February delivery fell 16.3 cents, or 3.5 percent, to $4.518 per million Btu on the New York exchange, the lowest closing price since Sept. 27, 2006. Prices have dropped 20 percent this year (asr: 2009? wow 23 days in JAN drop of 20% seems people saw the coming low demand from industry )
Consumption of gas to run factories and produce chemicals is falling as companies shut plants and fire workers. The number of Americans filing their first unemployment-benefit claims matched a 26-year high, the U.S. government said yesterday. Industrial users account for about 29 percent of U.S. gas demand.
Initial jobless claims increased by 62,000 to 589,000, more than forecast, in the week ended Jan. 17, from a revised 527,000 the prior week, the Labor Department said in a report.
Weaker Demand
Demand from chemical makers and other large consumers of gas may fall 3 percent in 2009, the Energy Department said in a report on Jan. 13.
asr: see energy dept. said on Jan 13, 10 days before of this Jan 23 , if somebody pays attention to dept.
“Our lower 2009 price forecasts reflect the stagnant demand level and prolific domestic supply situation,” Speaker said.
Gas output in 2008 gained an estimated 5.9 percent, the Energy Department said in its Short-Term Energy Outlook released last week. That expansion of supply became available as the recession gained momentum in the U.S.
“In assessing the current fundamentals and the balance going forward, the crosshairs are being established on the intersection between the production impact of a lower rig count and any perceived recovery in non-weather-related demand,” he said.
Producers have begun to shut down rigs, which may boost gas prices in 2010, Speaker said.
There were 1,185 gas rigs operating in the U.S. for the week ended today, down from 1,606 in the week ended Sept. 12, the highest since at least July 1987, according to Baker Hughes Inc.
To contact the reporter on this story: Reg Curren in Calgary at rcurren@bloomberg.net.
Gas will average $5.69 per million British thermal units on the New York Mercantile Exchange this year, down from a forecast of $6 on Dec. 17, according to a report from Scott Speaker, JPMorgan’s natural gas strategist in New York. Prices will rebound to average $6.63 in 2010.
“It has become clearer in the past month that severe manufacturing weakness will have an impact on natural gas demand that goes beyond a brief hiccup or temporary condition simply needing some producer-driven tightening,” Speaker said in the report.
Natural gas for February delivery fell 16.3 cents, or 3.5 percent, to $4.518 per million Btu on the New York exchange, the lowest closing price since Sept. 27, 2006. Prices have dropped 20 percent this year (asr: 2009? wow 23 days in JAN drop of 20% seems people saw the coming low demand from industry )
Consumption of gas to run factories and produce chemicals is falling as companies shut plants and fire workers. The number of Americans filing their first unemployment-benefit claims matched a 26-year high, the U.S. government said yesterday. Industrial users account for about 29 percent of U.S. gas demand.
Initial jobless claims increased by 62,000 to 589,000, more than forecast, in the week ended Jan. 17, from a revised 527,000 the prior week, the Labor Department said in a report.
Weaker Demand
Demand from chemical makers and other large consumers of gas may fall 3 percent in 2009, the Energy Department said in a report on Jan. 13.
asr: see energy dept. said on Jan 13, 10 days before of this Jan 23 , if somebody pays attention to dept.
“Our lower 2009 price forecasts reflect the stagnant demand level and prolific domestic supply situation,” Speaker said.
Gas output in 2008 gained an estimated 5.9 percent, the Energy Department said in its Short-Term Energy Outlook released last week. That expansion of supply became available as the recession gained momentum in the U.S.
“In assessing the current fundamentals and the balance going forward, the crosshairs are being established on the intersection between the production impact of a lower rig count and any perceived recovery in non-weather-related demand,” he said.
Producers have begun to shut down rigs, which may boost gas prices in 2010, Speaker said.
There were 1,185 gas rigs operating in the U.S. for the week ended today, down from 1,606 in the week ended Sept. 12, the highest since at least July 1987, according to Baker Hughes Inc.
To contact the reporter on this story: Reg Curren in Calgary at rcurren@bloomberg.net.
Tuesday, January 20, 2009
Crude Oil Falls Below $33 a Barrel on Dollar, Contract Expiry
asr: oil price drivers as of today: 1)storage shortage 2) strong dollar 3) easing geo-political
Jan. 20 (Bloomberg) -- Crude oil fell below $33 a barrel in New York as the strengthening dollar reduced the appeal of commodity investments at a time when demand is declining and stockpiles are rising.
At Cushing, Oklahoma, where the benchmark for New York futures is stored, inventories have climbed to 33 million barrels, the highest since records started four years ago. The February contract will cease trading today, so traders have to sell futures or accept the barrels at a time of falling demand.
“Traders are rolling over to the next month to avoid delivery and the dollar is rallying,” said Andrey Kryuchenkov, an analyst with VTB Capital in London. “All this against a background of falling demand and easing geopolitical tensions.”
Crude oil for February delivery fell to $32.70, down 10.4 percent from last week’s close and the lowest since Dec. 19, on the New York Mercantile Exchange today. The contract traded at $33.37 a barrel at 10:45 a.m. London time.
Floor trading was closed for the Martin Luther King Jr. holiday yesterday. Trades then will be booked today for settlement. The more-actively traded March contract was at $39.59, down 7 percent.
The U.S. dollar climbed as high as $1.2921 against the euro, the strongest since Dec. 10, and traded for $1.2977 as of 10:25 a.m. London time. Gains in the U.S. currency diminish the appeal of dollar-priced commodities used to hedge against inflation.
‘Weak Sentiment’
“We’re seeing the dollar stronger again and weak demand(Oil) is still dominating,” said Hannes Loacker, an analyst at Raiffeisen Zentralbank Oesterreich in Vienna. “As long as the market ignores the supply side, we’ll have weak sentiment.”
The U.K. government said yesterday it will spend an extra 100 billion pounds ($142 billion) to support the nation’s banks, a second lifeline in three months. The need for the latest package spurred concern that global financial crisis is worsening.
“For the next six months we’ll see awful economic data coming out, banks possibly having to be nationalized and excess inventories in the U.S.,” said Jonathan Kornafel, a director for Asia at options traders Hudson Capital Energy in Singapore. “There is really nothing that can pull this market higher.”
Brent crude oil for March settlement fell as much as $1.54, 3.5 percent, to $42.96 a barrel on London’s ICE Futures Europe exchange. It traded for $43.60 at 10:50 a.m. London time.
Russia Dispute
Russia and Ukraine signed 10-year natural-gas contracts, ending a dispute that’s squeezed supplies to the European Union for almost two weeks. Shipments resumed today.
Rising U.S. stockpiles and forecasts from the International Energy Agency and OPEC on declining world demand contributed to an 11 percent decline in Nymex crude last week. Prices are down 20 percent this year, after tumbling 54 percent in 2008.
Crude-oil inventories at Cushing, Oklahoma, where West Texas Intermediate traded on the Nymex is stored, climbed 2.5 percent to 33 million barrels last week, the Energy Department said this week. It was the highest since at least April 2004, when the department began keeping records for the location.
Jan. 20 (Bloomberg) -- Crude oil fell below $33 a barrel in New York as the strengthening dollar reduced the appeal of commodity investments at a time when demand is declining and stockpiles are rising.
At Cushing, Oklahoma, where the benchmark for New York futures is stored, inventories have climbed to 33 million barrels, the highest since records started four years ago. The February contract will cease trading today, so traders have to sell futures or accept the barrels at a time of falling demand.
“Traders are rolling over to the next month to avoid delivery and the dollar is rallying,” said Andrey Kryuchenkov, an analyst with VTB Capital in London. “All this against a background of falling demand and easing geopolitical tensions.”
Crude oil for February delivery fell to $32.70, down 10.4 percent from last week’s close and the lowest since Dec. 19, on the New York Mercantile Exchange today. The contract traded at $33.37 a barrel at 10:45 a.m. London time.
Floor trading was closed for the Martin Luther King Jr. holiday yesterday. Trades then will be booked today for settlement. The more-actively traded March contract was at $39.59, down 7 percent.
The U.S. dollar climbed as high as $1.2921 against the euro, the strongest since Dec. 10, and traded for $1.2977 as of 10:25 a.m. London time. Gains in the U.S. currency diminish the appeal of dollar-priced commodities used to hedge against inflation.
‘Weak Sentiment’
“We’re seeing the dollar stronger again and weak demand(Oil) is still dominating,” said Hannes Loacker, an analyst at Raiffeisen Zentralbank Oesterreich in Vienna. “As long as the market ignores the supply side, we’ll have weak sentiment.”
The U.K. government said yesterday it will spend an extra 100 billion pounds ($142 billion) to support the nation’s banks, a second lifeline in three months. The need for the latest package spurred concern that global financial crisis is worsening.
“For the next six months we’ll see awful economic data coming out, banks possibly having to be nationalized and excess inventories in the U.S.,” said Jonathan Kornafel, a director for Asia at options traders Hudson Capital Energy in Singapore. “There is really nothing that can pull this market higher.”
Brent crude oil for March settlement fell as much as $1.54, 3.5 percent, to $42.96 a barrel on London’s ICE Futures Europe exchange. It traded for $43.60 at 10:50 a.m. London time.
Russia Dispute
Russia and Ukraine signed 10-year natural-gas contracts, ending a dispute that’s squeezed supplies to the European Union for almost two weeks. Shipments resumed today.
Rising U.S. stockpiles and forecasts from the International Energy Agency and OPEC on declining world demand contributed to an 11 percent decline in Nymex crude last week. Prices are down 20 percent this year, after tumbling 54 percent in 2008.
Crude-oil inventories at Cushing, Oklahoma, where West Texas Intermediate traded on the Nymex is stored, climbed 2.5 percent to 33 million barrels last week, the Energy Department said this week. It was the highest since at least April 2004, when the department began keeping records for the location.
Oil price forecasts
-----------
$90-a-barrel 2010 price forecast for West Texas Intermediate crude futures,
- Dec 3, 2009
NEW YORK, Dec 3 (Reuters) - U.S. investment bank Goldman Sachs (GS.N) maintained on Thursday its previous $90-a-barrel 2010 price forecast for West Texas Intermediate crude futures, but predicted the NYMEX crude futures would rise to $110 a barrel in 2011, on rising demand from emerging markets.
In a research report, Goldman Sachs lowered its 2010 price forecast for NYMEX natural gas futures to $6 per million British Thermal Units (MMBTU), down from a previous forecast of $7.30. The bank expects natural gas prices to rise to $6.50/MMBTU in 2011.
"Overall, we leave our 2010 WTI crude oil forecasts largely unchanged at an average price of $90/bbl, but with lower prices at the start of the year and higher prices at the end," the bank said in a report.
--------------
these came from these URL , this is PDF of 10/13/09 , link from Mr. K posts ..
http://www.scribd.com/doc/21000080/Goldman-Sachs-Research-Commodity-Watch
asr note: interesting GOldman "BUY 2009/sell 2011 " initiated in FEB/2009 gave profit of $3.5/bbl in 8 months.
- many entries in these PDFs are what Goldman gave outside release for OIL esp. 2009 year end traget $85 and 2010 target $95
http://www.scribd.com/doc/21000080/Goldman-Sachs-Research-Commodity-Watch
---------------
Goldman raises oil-demand forecast - 9/23/09
Analysts at Goldman Sachs raised their forecasts Friday for global oil demand for the fourth quarter of 2009 and for 2010 by 1.2 million barrels a day and 1.6 million barrels a day, respectively.
"The permanent damage from the credit crisis is much less than we had previously thought, which means that we are beginning the recovery from a higher base," wrote Jeffrey Currie and other Goldman analysts in a research note.
At the same time, Goldman maintained its price forecasts, saying that higher anticipated demand has been met by stronger supply, particularly out of Russia and the rest of the former Soviet Union.
As a result, Goldman raised its global supply forecasts by an amount similar to its global demand forecast.
Goldman kept its end-of-year target for benchmark crude prices at $85 a barrel, along with an average 2010 price forecast of $90 a barrel and its end-of-2010 target of $95 a barrel.
( asr: this $85 year end target was issued in june/2009 with this issue OIL touched from dropped 70 to 75 see notes below.)
asr: i think today price of $66 is one of the last oppertunities to get OIL for rest of 2009 , I belive for next 3 months OIL will maintain above 70 avarging around 73-78 range)
-------------------------------------------------------------------------------------------------
asr: these 2 reports are released on June 4 , 2009 , after a June 3 drop from 69 to 66
see these timing of the report , Gold man waited to for a prefect day of down price to issue to 75 from $52 .
asr: It seems this $75 is near term target ( read 3 months) and $85 is year end target .
-------
what a play by Goldman Sachs and other funds!
http://www.elitetrader.com/vb/showthread.php?s=&postid=2453874#post2453874
First the complete lack of buying yesterday (read VSA) caused market to drop $4 from its highs. As it was dropping Goldman and other funds were buying. When Goldman completed its buying at EOD it issues a report for $85 oil! and then market jumps $4 today....
New money and small account holders wiped out!
----------
Goldman Sachs lift oil price target to $75
http://www.marketwatch.com/story/goldman-sachs-lift-oil-price-target-to-75
LONDON (MarketWatch) -- Goldman Sachs lifted its target on light sweet crude oil to $75 a barrel from $52. "The recent rally in WTI prices is likely to be but the first stage in the oil price rally that we expect will accompany a recovery in economic activity. In all, we expect the rally we have just observed to be followed by three more stages, creating a four-stage rally in oil prices in 2009 and 2010," the broker said
------------
Goldman raises end of 2009 oil price target to $85
LONDON, June 4 (Reuters) - Goldman Sachs raised its end of 2009 oil price forecast to $85 a barrel from $65 and introduced a new end of 2010 forecast of $95, the U.S. bank said in a research note.
Goldman said the recent rise in U.S. crude prices was likely to be the first stage in the oil price rally that it expects will accompany a recovery in economic activity.
--------
this post was around Jan 15 , 2009
Goldman Sachs said Monday the price of oil could fall below $30 a barrel in the short-term before rising to $65 in the fourth quarter.
$90-a-barrel 2010 price forecast for West Texas Intermediate crude futures,
- Dec 3, 2009
NEW YORK, Dec 3 (Reuters) - U.S. investment bank Goldman Sachs (GS.N) maintained on Thursday its previous $90-a-barrel 2010 price forecast for West Texas Intermediate crude futures, but predicted the NYMEX crude futures would rise to $110 a barrel in 2011, on rising demand from emerging markets.
In a research report, Goldman Sachs lowered its 2010 price forecast for NYMEX natural gas futures to $6 per million British Thermal Units (MMBTU), down from a previous forecast of $7.30. The bank expects natural gas prices to rise to $6.50/MMBTU in 2011.
"Overall, we leave our 2010 WTI crude oil forecasts largely unchanged at an average price of $90/bbl, but with lower prices at the start of the year and higher prices at the end," the bank said in a report.
--------------
these came from these URL , this is PDF of 10/13/09 , link from Mr. K posts ..
http://www.scribd.com/doc/21000080/Goldman-Sachs-Research-Commodity-Watch
asr note: interesting GOldman "BUY 2009/sell 2011 " initiated in FEB/2009 gave profit of $3.5/bbl in 8 months.
- many entries in these PDFs are what Goldman gave outside release for OIL esp. 2009 year end traget $85 and 2010 target $95
http://www.scribd.com/doc/21000080/Goldman-Sachs-Research-Commodity-Watch
---------------
Goldman raises oil-demand forecast - 9/23/09
Analysts at Goldman Sachs raised their forecasts Friday for global oil demand for the fourth quarter of 2009 and for 2010 by 1.2 million barrels a day and 1.6 million barrels a day, respectively.
"The permanent damage from the credit crisis is much less than we had previously thought, which means that we are beginning the recovery from a higher base," wrote Jeffrey Currie and other Goldman analysts in a research note.
At the same time, Goldman maintained its price forecasts, saying that higher anticipated demand has been met by stronger supply, particularly out of Russia and the rest of the former Soviet Union.
As a result, Goldman raised its global supply forecasts by an amount similar to its global demand forecast.
Goldman kept its end-of-year target for benchmark crude prices at $85 a barrel, along with an average 2010 price forecast of $90 a barrel and its end-of-2010 target of $95 a barrel.
( asr: this $85 year end target was issued in june/2009 with this issue OIL touched from dropped 70 to 75 see notes below.)
asr: i think today price of $66 is one of the last oppertunities to get OIL for rest of 2009 , I belive for next 3 months OIL will maintain above 70 avarging around 73-78 range)
-------------------------------------------------------------------------------------------------
asr: these 2 reports are released on June 4 , 2009 , after a June 3 drop from 69 to 66
see these timing of the report , Gold man waited to for a prefect day of down price to issue to 75 from $52 .
asr: It seems this $75 is near term target ( read 3 months) and $85 is year end target .
-------
what a play by Goldman Sachs and other funds!
http://www.elitetrader.com/vb/showthread.php?s=&postid=2453874#post2453874
First the complete lack of buying yesterday (read VSA) caused market to drop $4 from its highs. As it was dropping Goldman and other funds were buying. When Goldman completed its buying at EOD it issues a report for $85 oil! and then market jumps $4 today....
New money and small account holders wiped out!
----------
Goldman Sachs lift oil price target to $75
http://www.marketwatch.com/story/goldman-sachs-lift-oil-price-target-to-75
LONDON (MarketWatch) -- Goldman Sachs lifted its target on light sweet crude oil to $75 a barrel from $52. "The recent rally in WTI prices is likely to be but the first stage in the oil price rally that we expect will accompany a recovery in economic activity. In all, we expect the rally we have just observed to be followed by three more stages, creating a four-stage rally in oil prices in 2009 and 2010," the broker said
------------
Goldman raises end of 2009 oil price target to $85
LONDON, June 4 (Reuters) - Goldman Sachs raised its end of 2009 oil price forecast to $85 a barrel from $65 and introduced a new end of 2010 forecast of $95, the U.S. bank said in a research note.
Goldman said the recent rise in U.S. crude prices was likely to be the first stage in the oil price rally that it expects will accompany a recovery in economic activity.
--------
this post was around Jan 15 , 2009
Goldman Sachs said Monday the price of oil could fall below $30 a barrel in the short-term before rising to $65 in the fourth quarter.
Thursday, January 15, 2009
spread-betting
Why spread betting popular in UK
1) Spread betting on these markets means that any profits are tax-free
2) higher levarage ( $1500 init deposit vs. $8000 for crude contract to trade )
3) all instuments are offered in one firm forex, stocks, commodities where as with regular brokers you need to go to 2 to 3 firms
Experienced traders all spread bet for the simple reason that if they can make £10,000 from spread betting, then they can keep £10,000 spread betting, rather than handing over a significant proportion of it to the taxman.
There is no Capital Gains Tax payable on any gain from Financial Spread Betting. Consequently, losses cannot be offset against any capital gain.
There are now over 20 spread betting providers in the UK, and fierce competition has driven spreads down. A decade ago, the spread on a benchmark index such as the FTSE 100 index was around 10 points. Today it has fallen to around two. Consolidation rumours are constant, but most believe that the market is growing sufficiently to support this number of providers.
Over 400,000 people in the UK have a spread betting account, and the majority of the traders, currently, are male. Spread betters tend to be self employed individuals or those working in the IT and finance and insurance sectors. Who uses spread bets and what markets are available?
With the January Nymex crude future quoted at 48.79-48.87 at Deal4free, someone who was bearish could have sold the spread at 48.79 for say £10 per point, a position requiring a mhttp://www.blogger.com/img/blank.gif
insert bold tagsargin deposit of £1,400. The subsequent collapse in the price took the spread to 43.21-43.29 so that the bet could have been closed at 43.29 for a profit of £5,500.
asr: with $1400 you can have a position , where as for broker acct. you need init. margin of $7000
'Spread betting on these markets means that any profits are tax-free
There is greater flexibility over the size of the exposure than there
is when trading the futures contracts directly.'
Note that if you're an American you cannot participate in financial spread betting (unless you create an offshore company) because sites like Capital Spreads are highly regulated by the British Government (specifically, the FSA) which does not allow these sites to violate the U.S. laws prohibiting Americans from trading derivatives outside the U.S. Yes that's right...you're the only western industrialized nation that prohibits its supposedly 'free' citizens from speculating with your money offshore as you see fit. Call it protectionism by the CFTC, call it 'big brother,' call it whatever you like; it isn't right. If you are from the US you simply have to consider taxes as a type of 'slippage' that you as a trader in the States need to overcome with better 'edges'...
----------------
Do Spread Betting firms really hedge?
asr: it seems these firm employees have good access to customer records as they do lots of manual processing ..
so you may be able to get consistently losing customer records easily and their trades ( esp. if they are new customers and have access to real time trades )
My own personal view is that the different companies will note your trading style and that can determine what kind of service you receive. If you scalp trade effectively (scalpers attempt to 'scalp' i.e. extract profits from small price movements using large position sizes) then you will often upset the spreadbetting companies, I know companies will argue this but that is my experience and therefore my view. More than a year ago I had a dispute IG Index which is evidence of that. IG are happy to send out advertising literature stating that 'prices are always live and tradable' and that 'the price you see is the price you get' - this is in order to attract customers to their platform. However, as you become a better trader and win money in very short time-frames you may start to get treated differently
If we are honest then we know that, in this computer driven world which we now live, it is possible to execute customer's orders electronically in a fraction of a second. Ask yourself why many of these companies still route certain orders or customers through a manual dealing procedure? These companies are fully aware that an introduction of a delay gives them a chance to observe movements within the market which were subsequent to the order being placed - of course they can then use these 'subsequent movements' to determine the financial viability of the submitted order.
1) Spread betting on these markets means that any profits are tax-free
2) higher levarage ( $1500 init deposit vs. $8000 for crude contract to trade )
3) all instuments are offered in one firm forex, stocks, commodities where as with regular brokers you need to go to 2 to 3 firms
Experienced traders all spread bet for the simple reason that if they can make £10,000 from spread betting, then they can keep £10,000 spread betting, rather than handing over a significant proportion of it to the taxman.
There is no Capital Gains Tax payable on any gain from Financial Spread Betting. Consequently, losses cannot be offset against any capital gain.
There are now over 20 spread betting providers in the UK, and fierce competition has driven spreads down. A decade ago, the spread on a benchmark index such as the FTSE 100 index was around 10 points. Today it has fallen to around two. Consolidation rumours are constant, but most believe that the market is growing sufficiently to support this number of providers.
Over 400,000 people in the UK have a spread betting account, and the majority of the traders, currently, are male. Spread betters tend to be self employed individuals or those working in the IT and finance and insurance sectors. Who uses spread bets and what markets are available?
With the January Nymex crude future quoted at 48.79-48.87 at Deal4free, someone who was bearish could have sold the spread at 48.79 for say £10 per point, a position requiring a mhttp://www.blogger.com/img/blank.gif
insert bold tagsargin deposit of £1,400. The subsequent collapse in the price took the spread to 43.21-43.29 so that the bet could have been closed at 43.29 for a profit of £5,500.
asr: with $1400 you can have a position , where as for broker acct. you need init. margin of $7000
'Spread betting on these markets means that any profits are tax-free
There is greater flexibility over the size of the exposure than there
is when trading the futures contracts directly.'
Note that if you're an American you cannot participate in financial spread betting (unless you create an offshore company) because sites like Capital Spreads are highly regulated by the British Government (specifically, the FSA) which does not allow these sites to violate the U.S. laws prohibiting Americans from trading derivatives outside the U.S. Yes that's right...you're the only western industrialized nation that prohibits its supposedly 'free' citizens from speculating with your money offshore as you see fit. Call it protectionism by the CFTC, call it 'big brother,' call it whatever you like; it isn't right. If you are from the US you simply have to consider taxes as a type of 'slippage' that you as a trader in the States need to overcome with better 'edges'...
----------------
Do Spread Betting firms really hedge?
asr: it seems these firm employees have good access to customer records as they do lots of manual processing ..
so you may be able to get consistently losing customer records easily and their trades ( esp. if they are new customers and have access to real time trades )
My own personal view is that the different companies will note your trading style and that can determine what kind of service you receive. If you scalp trade effectively (scalpers attempt to 'scalp' i.e. extract profits from small price movements using large position sizes) then you will often upset the spreadbetting companies, I know companies will argue this but that is my experience and therefore my view. More than a year ago I had a dispute IG Index which is evidence of that. IG are happy to send out advertising literature stating that 'prices are always live and tradable' and that 'the price you see is the price you get' - this is in order to attract customers to their platform. However, as you become a better trader and win money in very short time-frames you may start to get treated differently
If we are honest then we know that, in this computer driven world which we now live, it is possible to execute customer's orders electronically in a fraction of a second. Ask yourself why many of these companies still route certain orders or customers through a manual dealing procedure? These companies are fully aware that an introduction of a delay gives them a chance to observe movements within the market which were subsequent to the order being placed - of course they can then use these 'subsequent movements' to determine the financial viability of the submitted order.
Feb-March-APR crude oil spreads
"Refineries are loading up barges and tankers and just having them sit full of crude oil," said Darin Newsom, a senior analyst at DTN, a market-information service.
asr: the Feb-March-APR spread shown are as of Jan 15 th early hours (EST )
"This is an indication of just how bearish this market actually is."
The tight storage situation caused February crude to end at a $US6.91 discount to March, the third-largest such deficit ever. Traders expect the gap to continue to widen as the February contract enters its final week of trading, and note that the March-April spread also has expanded to $US4.09.
"Seven dollars is ludicrous, $US4 is astronomical, and April-May at $US2.50 is extremely wide," said Peter Donovan, vice-president of Vantage Trading in New York. "It doesn't go on forever though. At some point you're going to see the supply side start to tighten up a bit."
Eventually, production cuts by the Organisation of Petroleum Exporting Countries or other producers will bring supply in line with weakened demand, causing some of those full storage tanks to empty out, Mr Donovan said.
asr: the Feb-March-APR spread shown are as of Jan 15 th early hours (EST )
"This is an indication of just how bearish this market actually is."
The tight storage situation caused February crude to end at a $US6.91 discount to March, the third-largest such deficit ever. Traders expect the gap to continue to widen as the February contract enters its final week of trading, and note that the March-April spread also has expanded to $US4.09.
"Seven dollars is ludicrous, $US4 is astronomical, and April-May at $US2.50 is extremely wide," said Peter Donovan, vice-president of Vantage Trading in New York. "It doesn't go on forever though. At some point you're going to see the supply side start to tighten up a bit."
Eventually, production cuts by the Organisation of Petroleum Exporting Countries or other producers will bring supply in line with weakened demand, causing some of those full storage tanks to empty out, Mr Donovan said.
Tuesday, January 13, 2009
Crude Oil Falls for Sixth Day on Concern Stockpiles Are Rising
http://www.bloomberg.com/apps/news?pid=20601087&sid=aOgtb55xDvP0&refer=home
China, the world’s second-largest energy user after the U.S., increased crude-oil imports by 12 percent last month as the country took advantage of falling fuel purchase costs to boost stockpiles.
Imports rose to 14.37 million metric tons from a year earlier, the Beijing-based Customs General Administration of China said on its Web site today. Full-year imports increased 9.6 percent to 178.9 million tons.
asr: full year import increase of 9.6% ( in 2008 compared to 2007 ) is really big number so this projection in 2008 June time when oil hit 147 , justifies till some extent high 147 when china expected to increase import 10% ( AND projected more as economy improves as is the thought as of JUNE 2008 )
3) Commodities Drop
Most commodities declined yesterday because of falling demand for raw materials, with corn, soybeans and wheat dropping the most allowed by the Chicago Board of Trade in a single day. The Reuters/Jefferies CRB Index of 19 commodities slid as much as 4 percent.
China, the world’s second-largest energy user after the U.S., increased crude-oil imports by 12 percent last month as the country took advantage of falling fuel purchase costs to boost stockpiles.
Imports rose to 14.37 million metric tons from a year earlier, the Beijing-based Customs General Administration of China said on its Web site today. Full-year imports increased 9.6 percent to 178.9 million tons.
asr: full year import increase of 9.6% ( in 2008 compared to 2007 ) is really big number so this projection in 2008 June time when oil hit 147 , justifies till some extent high 147 when china expected to increase import 10% ( AND projected more as economy improves as is the thought as of JUNE 2008 )
3) Commodities Drop
Most commodities declined yesterday because of falling demand for raw materials, with corn, soybeans and wheat dropping the most allowed by the Chicago Board of Trade in a single day. The Reuters/Jefferies CRB Index of 19 commodities slid as much as 4 percent.
Sunday, January 11, 2009
ANALYSIS-Victory elusive for both Israel and Hamas
Sun Jan 11, 2009
By Luke Baker
http://www.reuters.com/article/latestCrisis/idUSL9626678
JERUSALEM, Jan 11 (Reuters) - When the firing eventually stops in the Gaza Strip, the question of "who won?" will hang heavily over the death and destruction. Neither Israel nor Hamas will be able to answer it with any certainty or immediacy.
Israel says it launched its offensive on Dec. 27 to put a stop once and for all to Hamas's firing of rockets and mortars over the border into southern Israeli towns and cities. That objective, at least, has been stated very clearly.
Yet after two weeks of fighting, the rockets -- more than 4,000 of which have been fired since 2001 -- are still coming, even if in far fewer numbers than two weeks ago. Israel believes the Palestinians are still capable of firing 200 rockets a day.
A ceasefire in which Hamas agrees to halt rocket fire might well be struck, but the chance of it holding forever, as Israel would like, is next to nil, and there are other militant groups in Gaza which could violate the deal, reigniting the conflict.
Israel also wants a "mechanism" to stop arms smuggling into Gaza from Egypt and thus starve Hamas of rocket materiel. But it is unclear what this would entail, not least as Cairo has balked at calls for international forces on its side of the frontier. That is why some Israeli leaders argue the operation needs to go much further and seek to destroy Hamas completely, killing off its leadership and causing so much hardship in Gaza that the population turns against the Islamists they elected in 2006.
Yet eradicating Hamas is a much tougher objective and one that Israel is unlikely to achieve in the time left before it has to give in to international pressure and halt operations.
So if Israel can't wipe out Hamas or completely halt rocket fire, what will it be able to show for weeks of fighting in which some 850 Palestinians and 13 Israelis have died, and international condemnation has been heaped on the Jewish state?
STRATEGIC ERROR?
While acknowledging Israel's need to tackle the rocket threat from Hamas, U.S. security analyst Anthony Cordesman argues that its strategy could backfire.
"It is far from clear that the tactical gains are worth the political and strategic cost to Israel," he wrote in commentary for the Center for Strategic and International Studies.
"Has Israel somehow blundered into a steadily escalating war without a clear strategic goal or at least one it can credibly achieve?
"Will Israel end in empowering an enemy in political terms that it defeated in tactical terms? Will Israel's actions seriously damage the U.S. position in the region, any hope of peace, as well as moderate Arab regimes and voices?
"To be blunt, the answer so far seems to be yes," he wrote.
Israel believes it has succeeded in reducing Hamas's ability to fire rockets, proved its "deterrence" capability, killed many Hamas commanders and perhaps made more Palestinians in Gaza question the wisdom of the strict Islamist group's behaviour.
All of which, combined with the possibility that Hamas might eventually submit to a ceasefire, appears to be giving Israeli military and political leaders the reassurances to carry on.
Israeli Deputy Defence Minister Matan Vilnai said on Sunday: "We have scored achievements no one dreamed of two weeks ago.
"As for the blow to Hamas, they still don't understand what they've sustained. They'll understand better when they emerge."
So far Israel's Jewish majority is wholeheartedly behind the leadership, but the concept of victory -- so desperately sought after the inconclusive 2006 war against Hezbollah guerrillas in Lebanon and so necessary for national pride -- remains distant.
STILL POPULAR?
Likewise, Hamas can hardly declare itself an outright winner, either now or once the guns have fallen silent.
As Hezbollah did after its 34-day war with Israel, Hamas may well cast itself as the underdog that held off the might of the hi-tech, U.S.-sponsored Israeli army, and draw praise for that.
But for all those Palestinians in Gaza who will feel pride at the resistance Hamas put up, others will gaze at the ruined buildings and freshly dug graves and wonder if it was worth it.
When the Palestinians held legislative elections in early 2006, Hamas defeated its long-dominant rival Fatah.
Fatah was tainted by corruption and failure to meet the needs of the 3.9 million Palestinians in the West Bank and Gaza. Hamas, on the other hand, was widely regarded for charity work and held in popular esteem for its fiery probity and piety.
Hamas had also dented Israeli security with sprees of suicide bombings. Now its fighters are better known for firing rockets -- both homemade and imported -- into the Jewish state.
President Mahmoud Abbas, the Fatah leader whose writ extends only to the West Bank since Hamas routed his forces in Gaza in 2007, has promised parliamentary and presidential elections -- but Hamas no longer accepts his legitimacy and it is not clear when Gazans will have another chance to elect their leaders.
Israel and the West want Palestinians to shun Hamas, with its ultimate goal of destroying Israel, and rally round Abbas and "moderates" ready to negotiate peace -- even though past diplomacy has brought Palestinians no closer to statehood.
Some allies, including French President Nicolas Sarkozy who is trying to broker a ceasefire, have told Israel it risks weakening Abbas in favour of radicals like Hamas by fighting.
As Hamas's leader in exile Khaled Meshaal told Israelis on Saturday: "You have created resistance in every household."
Expect both sides to claim victory when the war ends. Whoever is deemed the winner, civilians will have paid the price. (Editing by Alastair Macdonald and Michael Roddy)
By Luke Baker
http://www.reuters.com/article/latestCrisis/idUSL9626678
JERUSALEM, Jan 11 (Reuters) - When the firing eventually stops in the Gaza Strip, the question of "who won?" will hang heavily over the death and destruction. Neither Israel nor Hamas will be able to answer it with any certainty or immediacy.
Israel says it launched its offensive on Dec. 27 to put a stop once and for all to Hamas's firing of rockets and mortars over the border into southern Israeli towns and cities. That objective, at least, has been stated very clearly.
Yet after two weeks of fighting, the rockets -- more than 4,000 of which have been fired since 2001 -- are still coming, even if in far fewer numbers than two weeks ago. Israel believes the Palestinians are still capable of firing 200 rockets a day.
A ceasefire in which Hamas agrees to halt rocket fire might well be struck, but the chance of it holding forever, as Israel would like, is next to nil, and there are other militant groups in Gaza which could violate the deal, reigniting the conflict.
Israel also wants a "mechanism" to stop arms smuggling into Gaza from Egypt and thus starve Hamas of rocket materiel. But it is unclear what this would entail, not least as Cairo has balked at calls for international forces on its side of the frontier. That is why some Israeli leaders argue the operation needs to go much further and seek to destroy Hamas completely, killing off its leadership and causing so much hardship in Gaza that the population turns against the Islamists they elected in 2006.
Yet eradicating Hamas is a much tougher objective and one that Israel is unlikely to achieve in the time left before it has to give in to international pressure and halt operations.
So if Israel can't wipe out Hamas or completely halt rocket fire, what will it be able to show for weeks of fighting in which some 850 Palestinians and 13 Israelis have died, and international condemnation has been heaped on the Jewish state?
STRATEGIC ERROR?
While acknowledging Israel's need to tackle the rocket threat from Hamas, U.S. security analyst Anthony Cordesman argues that its strategy could backfire.
"It is far from clear that the tactical gains are worth the political and strategic cost to Israel," he wrote in commentary for the Center for Strategic and International Studies.
"Has Israel somehow blundered into a steadily escalating war without a clear strategic goal or at least one it can credibly achieve?
"Will Israel end in empowering an enemy in political terms that it defeated in tactical terms? Will Israel's actions seriously damage the U.S. position in the region, any hope of peace, as well as moderate Arab regimes and voices?
"To be blunt, the answer so far seems to be yes," he wrote.
Israel believes it has succeeded in reducing Hamas's ability to fire rockets, proved its "deterrence" capability, killed many Hamas commanders and perhaps made more Palestinians in Gaza question the wisdom of the strict Islamist group's behaviour.
All of which, combined with the possibility that Hamas might eventually submit to a ceasefire, appears to be giving Israeli military and political leaders the reassurances to carry on.
Israeli Deputy Defence Minister Matan Vilnai said on Sunday: "We have scored achievements no one dreamed of two weeks ago.
"As for the blow to Hamas, they still don't understand what they've sustained. They'll understand better when they emerge."
So far Israel's Jewish majority is wholeheartedly behind the leadership, but the concept of victory -- so desperately sought after the inconclusive 2006 war against Hezbollah guerrillas in Lebanon and so necessary for national pride -- remains distant.
STILL POPULAR?
Likewise, Hamas can hardly declare itself an outright winner, either now or once the guns have fallen silent.
As Hezbollah did after its 34-day war with Israel, Hamas may well cast itself as the underdog that held off the might of the hi-tech, U.S.-sponsored Israeli army, and draw praise for that.
But for all those Palestinians in Gaza who will feel pride at the resistance Hamas put up, others will gaze at the ruined buildings and freshly dug graves and wonder if it was worth it.
When the Palestinians held legislative elections in early 2006, Hamas defeated its long-dominant rival Fatah.
Fatah was tainted by corruption and failure to meet the needs of the 3.9 million Palestinians in the West Bank and Gaza. Hamas, on the other hand, was widely regarded for charity work and held in popular esteem for its fiery probity and piety.
Hamas had also dented Israeli security with sprees of suicide bombings. Now its fighters are better known for firing rockets -- both homemade and imported -- into the Jewish state.
President Mahmoud Abbas, the Fatah leader whose writ extends only to the West Bank since Hamas routed his forces in Gaza in 2007, has promised parliamentary and presidential elections -- but Hamas no longer accepts his legitimacy and it is not clear when Gazans will have another chance to elect their leaders.
Israel and the West want Palestinians to shun Hamas, with its ultimate goal of destroying Israel, and rally round Abbas and "moderates" ready to negotiate peace -- even though past diplomacy has brought Palestinians no closer to statehood.
Some allies, including French President Nicolas Sarkozy who is trying to broker a ceasefire, have told Israel it risks weakening Abbas in favour of radicals like Hamas by fighting.
As Hamas's leader in exile Khaled Meshaal told Israelis on Saturday: "You have created resistance in every household."
Expect both sides to claim victory when the war ends. Whoever is deemed the winner, civilians will have paid the price. (Editing by Alastair Macdonald and Michael Roddy)
Wednesday, January 7, 2009
Oil Traders Seek Another 10 Tankers for Storage, Frontline Says
Jan. 7 (Bloomberg) -- Frontline Ltd., the world’s biggest owner of supertankers, said oil traders want to charter as many as 10 vessels to stockpile crude to take advantage of higher prices later in the year.
About 25 supertankers were already hired for storage and there are inquiries for 5 to 10 more, Jens Martin Jensen, Singapore-based interim chief executive officer of the company’s management unit, said by phone today.
The traders would buy crude now and sell it for delivery later, profiting from a futures market situation called contango where prices are higher as the year progresses. The vessels could handle as much as 20 million barrels, or about what is produced by OPEC member Algeria in 15 days. They would add to as much as 50 million barrels already hoarded at sea, for a combined amount equal to almost five days of European Union demand.
“I’ve never before seen storage demand on this scale,” said Didier Labat, a Paris-based shipbroker at Barry Rogliano Salles who has worked in tanker markets for about 20 years.
Commodities prices fell the most in five decades last year, with crude dropping more than $100 from the peak of $147.27 a barrel in July, as simultaneous recessions hit the U.S., Europe and Japan. Oil demand in 2008 fell for the first time since 1983, according to the Paris-based International Energy Agency.
Thirty-five supertankers represent about 7 percent of the global fleet of very large crude carriers, according to data from London-based Drewry Shipping Consultants Ltd. Storing oil in tankers may buoy rental rates that fell by a record 78 percent last year as slower economic growth sapped demand for energy.
Financing Costs
Traders are seeking to lease ships for three to nine months, Jensen said. Crude oil for December ( 2009) delivery traded at $61.90 a barrel as of 10:49 a.m. in London, $13.66 more than the February contract. Oil companies and traders may be able to profit from storing the oil, assuming shipping, insurance and financing costs are covered.
A supertanker would cost about 90 cents a barrel a month for storage depending on the length of the rental, according to data last month from shipbroker Galbraith’s Ltd.
Iran, the second-largest member of the Organization of Petroleum Exporting Countries after Saudi Arabia, idled as many as 15 of its biggest ships in May to store crude oil. That contributed to three consecutive months of higher rental rates for ships.
The cost of delivering Middle East oil to Asia, the world’s busiest route for supertankers, rose yesterday for the first time since Dec. 5, according to the Baltic Exchange in London.
Forward freight agreements advanced. The derivatives are used by traders to bet on the future price of hauling Saudi Arabian cargoes to Japan, an industry benchmark.
Derivatives Advance
The contracts traded at about 46 Worldscale points for the fourth quarter, according to prices from Oslo-based broker Imarex ASA as of 10:34 a.m. London time. They closed at 45 yesterday.
Worldscale points are a percentage of a nominal rate for more than 320,000 specific routes. They give owners and oil companies a starting point for negotiating hire rates without having to calculate the value of each deal from scratch.
Frontline, based in Bermuda, has advanced 13 percent in Oslo trading this year. The five-member Bloomberg Tanker Index has gained 12 percent.
EU oil consumption averaged 14.86 million barrels a day in 2007, according to data from BP Plc.
To contact the reporter on this story: Alaric Nightingale in London at Anightingal1@bloomberg.net
About 25 supertankers were already hired for storage and there are inquiries for 5 to 10 more, Jens Martin Jensen, Singapore-based interim chief executive officer of the company’s management unit, said by phone today.
The traders would buy crude now and sell it for delivery later, profiting from a futures market situation called contango where prices are higher as the year progresses. The vessels could handle as much as 20 million barrels, or about what is produced by OPEC member Algeria in 15 days. They would add to as much as 50 million barrels already hoarded at sea, for a combined amount equal to almost five days of European Union demand.
“I’ve never before seen storage demand on this scale,” said Didier Labat, a Paris-based shipbroker at Barry Rogliano Salles who has worked in tanker markets for about 20 years.
Commodities prices fell the most in five decades last year, with crude dropping more than $100 from the peak of $147.27 a barrel in July, as simultaneous recessions hit the U.S., Europe and Japan. Oil demand in 2008 fell for the first time since 1983, according to the Paris-based International Energy Agency.
Thirty-five supertankers represent about 7 percent of the global fleet of very large crude carriers, according to data from London-based Drewry Shipping Consultants Ltd. Storing oil in tankers may buoy rental rates that fell by a record 78 percent last year as slower economic growth sapped demand for energy.
Financing Costs
Traders are seeking to lease ships for three to nine months, Jensen said. Crude oil for December ( 2009) delivery traded at $61.90 a barrel as of 10:49 a.m. in London, $13.66 more than the February contract. Oil companies and traders may be able to profit from storing the oil, assuming shipping, insurance and financing costs are covered.
A supertanker would cost about 90 cents a barrel a month for storage depending on the length of the rental, according to data last month from shipbroker Galbraith’s Ltd.
Iran, the second-largest member of the Organization of Petroleum Exporting Countries after Saudi Arabia, idled as many as 15 of its biggest ships in May to store crude oil. That contributed to three consecutive months of higher rental rates for ships.
The cost of delivering Middle East oil to Asia, the world’s busiest route for supertankers, rose yesterday for the first time since Dec. 5, according to the Baltic Exchange in London.
Forward freight agreements advanced. The derivatives are used by traders to bet on the future price of hauling Saudi Arabian cargoes to Japan, an industry benchmark.
Derivatives Advance
The contracts traded at about 46 Worldscale points for the fourth quarter, according to prices from Oslo-based broker Imarex ASA as of 10:34 a.m. London time. They closed at 45 yesterday.
Worldscale points are a percentage of a nominal rate for more than 320,000 specific routes. They give owners and oil companies a starting point for negotiating hire rates without having to calculate the value of each deal from scratch.
Frontline, based in Bermuda, has advanced 13 percent in Oslo trading this year. The five-member Bloomberg Tanker Index has gained 12 percent.
EU oil consumption averaged 14.86 million barrels a day in 2007, according to data from BP Plc.
To contact the reporter on this story: Alaric Nightingale in London at Anightingal1@bloomberg.net
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