Crude Oil - Short positions highest level in 20 years history

verfasst von KEEP-COOL, 16.03.2003, 20:41

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03/15 00:01
Technical Traders Sell Oil Futures, Betting on Repeat of 1991
By Joe Carroll


New York, March 15 (Bloomberg) -- Futures broker Lannie Cohen is betting crude oil will tumble the day any U.S. attack on Iraq begins, because it happened that way last time.

Cohen is a technical trader, meaning he charts past price movements to assess the likely direction of the market. He and other technicians downplay analysts and economists who say the world's oil producers can't pump enough to cover shortages should war disrupt supplies from Iraq or its neighbors in the Persian Gulf, source of a quarter of the world's oil.

Speculators' short positions in crude oil on the New York Mercantile Exchange have more than doubled in the past three months, to the highest in the 20-year history of the contract, according to Commodity Futures Trading Commission data. A short position is a bet that crude oil will fall.

``We have been moving steadily up on war fears. Once we invade, look out,'' said Cohen, president of Capitol Commodity Services Inc. in Indianapolis. ``All you have to do is look at the historicals.''

New York crude oil plunged 40 percent in the first two trading sessions after a U.S.-led coalition began bombing Iraqi forces on Jan. 17, 1991. The price touched a record $41.15 a barrel on Oct. 11, 1990, as troops massed in the Persian Gulf.

This time, preparations for war have helped oil prices gain 54 percent from a year ago. New York oil rose as high as $39.99 last month. The U.S. and U.K. have moved nearly a quarter-million troops to the region.

Inventories

``We won't have a precipitous drop like we did in 1991 because inventories are so much lower now,'' said Andrew Lebow, an energy broker at Man Financial Inc. in New York. ``Things are way too tight.''

U.S. oil inventories are 17 percent lower than they were in January 1991, and demand is 13 percent higher, according to government and industry figures. A strike that began in December in Venezuela halted most exports from the world's fifth-largest source of petroleum, accounting for some drop in stockpiles.

Commercial supplies of crude in the U.S. last week fell to 269.8 million barrels, matching a 28-year low, according to Energy Department figures. At the outset of Desert Storm, there were 326.8 million barrels in storage.

Most of the world's oil producers are pumping at full capacity. They have just 900,000 barrels per day of spare production capacity, less than the 2.5 million barrels of Iraqi supplies that could be knocked off world markets by a war, the International Energy Agency said in a report this week.

By the time missiles starting exploding over Baghdad in 1991, oil prices had already retreated 22 percent from the record. Saudi Arabia, the world's biggest crude producer, and other OPEC members had increased output in the months after Saddam Hussein's August 1990 invasion of Kuwait provoked a U.N. embargo on Iraqi oil exports.

Strategic Reserves

Analysts also doubt U.S.-led forces can repeat the quick success of the Gulf War. A full-scale invasion of Iraq might take longer than the four days it took for U.S.-led troops to push Hussein's army out of Kuwait.

``We had a tremendous dropoff in prices when success became evident'' in 1991, said Marshall Steeves, an energy analyst at Refco Group Ltd. ``We won't see that again.'' Steeves predicts oil at $50 a barrel if OPEC and other producers fail to cover lost Iraqi supplies.

On the first day of the war in 1991, U.S. and European governments tapped emergency reserves. That boosted already ample global supplies, assuaging fears that refiners might have difficulty acquiring cargoes, said Michael Fitzpatrick, an energy specialist at Fimat USA Inc.

U.S. Energy Secretary Spencer Abraham has pledged to tap reserves again to cover any significant supply disruption. The U.S. and 25 other countries hold 4 billion barrels of emergency supplies. Still, traders worry Hussein may destroy wells in Iraq and neighboring countries, crippling supplies for years.

``If that happens, then we're in a world of hurt,'' said Bruce Lanni, senior oil analyst at A.G. Edwards & Sons Inc. ``There's very little give in the system as it is.''

`I See No Play'

Some technical traders said that the recent surge in crude prices has left them with few historical references that might help them divine the next trend.

Technical analysis is based on the idea that prices gain and lose momentum over time and will move in predictable ways as at levels that were important turning points in the past.

``Technical analysis is not voodoo,'' said Vincent Lanci, president of Berard Capital Management. ``It's a quantification of emotion based on price.''

Some technical tools become less useful as prices approach heights seen just once before. The October 1990 record and the two- day plunge after the last war began are the only reference points available.

``There's no historical reference point to look at,'' said A.G. Edwards's Lanni. ``We're in uncharted territory now.''

Anne Burden, president of Grants Pass Futures and Options, relies solely on technical tools. She is warning clients away from the oil market ``because there's nothing else to look at'' other than the 1990 high.

``From a speculator's point of view, I see no play,'' said Scott Barrie, president of Commodity Futures & Equity Analysts LLC. ``You hate to buy it because when it's that high it may be ready to fall. You hate to short it because of how much higher it might go.''


Nice evening and good luck

K C


>fertiggestellt. Nur soviel: Beim Crude wirds weiter aufwärts gehen, beim
>Dow weiter abwärts ;-)
>Schönes Wochenende
>Lentas

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gesamter Thread:

• Crude Oil und DOW Update... - Lentas, 15.03.2003, 22:33
  • Re: Crude Oil und DOW Update... / möchte das auch lesen, wie kann ich das?.... - - Elli -, 15.03.2003, 22:57
    • Mail ist unterwegs ;-) (owT) - Lentas, 15.03.2003, 23:20
  • Re: Crude Oil und DOW Update... - Aristoteles, 15.03.2003, 23:36
    • Nehme mit Dank... - Lentas, 15.03.2003, 23:49
  • Crude Oil - Short positions highest level in 20 years history - KEEP-COOL, 16.03.2003, 20:41
    • Re: Crude Oil - Short positions highest level in 20 years history - -- Elli --, 16.03.2003, 21:58
      • Re: Crude Oil - Short positions highest level in 20 years history - KEEP-COOL, 17.03.2003, 20:05
    • Re: Crude Oil - Short positions... Danke, und Jet...? - Firmian, 16.03.2003, 22:13
      • Re: Crude Oil - Short positions... Danke, und Jet...? - KEEP-COOL, 17.03.2003, 19:35