The future price is currently trading around 92 and spot price is hovering around 140. With less than week till expiry, what scenario is going to play out. Will future spike towards spot or spot free falls towards futures.
I think the futures will spike and if so what would be the impact on global economy.
please share your views. I am not a trader nor holding any positions but am interested in learning.
I want to start investing and want to know if the worst is over or just starting.
Posted by dep_sol
6 Comments
Based on everything I’ve gathered. Nothing. Market will be green, gas will be $20 a gal and likely on our 16th ceasefire
Where do you see the spot price 140?
Not much. They prepare for this by requiring everyone to be down to 6k contracts three days before the front month closes, then 5k, then 4k.
Yes volatility will be higher but not anything crazy like you’re theorizing.
Nothing will happen. Those futures contracts will just roll over. The reson is that the treasury is shorting the futures contracts. This is just a paper market not reflecting the spot price of oil.
We all understand that there’s manipulation going on in the futures market being done by the US government. What you need to look for is a catalyst that will bridge the gap between the futures market (manipulated market) and the spot market (physical market).
The European refineries are now saying that refining oil has turned into a deficit and not a profit. What is going on is that the refinery buys its oil at spot price, refines it, and sells the product on the futures market.
If the refinery is buying at 140 a barrel, buy the futures market is pricing all of the products of that oil at 100 a barrel, there will be a loss to the refinery. Since the paper market is telling the refinery that the price is too high for what they are trying to sell, the refinery will stop/reduce its output. There is no point for the refinery to keep producing oil derived products at a loss. This eventually takes more gasoline and diesel off the market, which in turn increase it’s price. When that happens the futures (paper market) will have to correct to the price of the spot market. If they dont, more and more refineries will keep shutting down or slow production. This will further increase the crisis that is being hidden by the current reflection of the paper markets.
You can’t manipulate the paper markets and expect the physical market to follow whatever price you set.
After europe, asia will have a similar article. Then more news will come out of refineries cutting on production due to the price discrepancy.
Source:
https://www.reuters.com/business/energy/european-oil-refining-margins-turn-negative-bucking-global-trend-2026-04-14/
Trading advice:
Long cl contracts for august or later. Not the front month contract.
Short SPX for august or later.
Trump will lie about the progression of talks and it will tank futures like he has done multiple times already. No way he sits there and says nothing whilst it rips.
[i found this](https://www.reddit.com/r/investing/s/ZS3mWgm0hQItriedexplainingitinthispost,ifyou%E2%80%99recuriousyoucantakealook)
Reddit link
Might be true , might not , keep in mind that the international agency of energy said this was the biggest oil shock on record .
Do you really think paper oil is gonna stay lower than 2022?