Courtesy of ilene
Let’s Break the $peculator$
Even this morning (Wednesday), we got another chance to short oil at $103 and now (7am) it has crossed the $102.50 line so that’s a winner for the $103 crowd, and a new entry opportunity for others on the $102.50 line on the futures if they cross below $102.50 again (nickel stops to keep risk low). This is not complicated guys – “THEY” are willing to fake a massive demand for oil but this game only works if nobody makes them pay.
When we short a barrel of oil on the futures, we MAKE THEM PAY for the barrels that they pretend they want. Right now, open interest on the NYMEX is 376,620 contracts for July delivery, which closes in three weeks on June 21st (contracts open that day must accept delivery during the month of July) and that’s 376 MILLION barrels of oil that “THEY” are currently pretending they want delivered at $103 a barrel within 2 months. That would be 40 days worth of US imports in a 30-day period all delivered to a terminal in Cushing, Oklahoma that has a 40M-barrel handling capacity for the month.