LONDON, Oct 5 (Reuters) – The booming business of
transporting Bakken crude has thrown a lifeline to U.S.
railroads, at a time when shipments of coal, their main
commodity by volume, have fallen sharply.
Coal accounted for just over 43 percent of rail car loadings
by weight, and 25 percent of gross revenues, last year according
to the Association of American Railroads (AAR).
LONDON (Reuters) – Now that domestic oil production is rising and imports are falling, should the United States reduce the amount of emergency oil it holds in giant salt caverns along the coast of Louisiana, or at least switch from stockpiling crude to holding refined products like gasoline, jet fuel and diesel?
“The United States will soon start selling oil from its Strategic Petroleum Reserve (SPR),” predicted leading energy analyst Phil Verleger in a thought-provoking article for “Petroleum Intelligence Weekly” last month (“Major SPR oil sales likely over next few years” Sep 17).
LONDON, Oct 4 (Reuters) – Now that domestic oil production
is rising and imports are falling, should the United States
reduce the amount of emergency oil it holds in giant salt
caverns along the coast of Louisiana, or at least switch from
stockpiling crude to holding refined products like gasoline, jet
fuel and diesel?
“The United States will soon start selling oil from its
Strategic Petroleum Reserve (SPR),” predicted leading energy
analyst Phil Verleger in a thought-provoking article for
“Petroleum Intelligence Weekly” last month (“Major SPR oil sales
likely over next few years” Sep 17).
LONDON (Reuters) – In throwing out controversial new rules on position limits, just two weeks before they were due to go into effect, U.S. District Judge Robert Wilkins has delivered a stunning setback to the Commodity Futures Trading Commission (CFTC), and handed a significant victory to derivatives dealers and investors fiercely opposed to new restrictions.
The practical impact is to preserve the existing system. The CFTC will continue to enforce federal limits on speculation in agricultural products like corn, wheat and soy, while futures exchanges will continue to enforce spot-month limits and broader position accountability levels for energy items like crude oil, gasoline and natural gas.
LONDON, Sept 28 (Reuters) – Even before new position limits
on energy contracts like crude and natural gas come into force
on October 12, the U.S. Commodity Futures Trading Commission
(CFTC) has taken an increasingly aggressive approach to
enforcing the existing limits on agricultural items like cotton,
wheat and soybeans.
In the last week alone, the CFTC has imposed civil monetary
penalties and disgorgements totalling nearly $2.5 million on
JPMorgan, Australia and New Zealand Bank, and a China-based
individual, Weidong Ge, to settle accusations they breached
federal speculative limits on cotton (all three respondents),
wheat (ANZ) and soybean oil (Weidong Ge).
LONDON (Reuters) – Monday’s sudden dive in oil prices appears more and more unusual with hindsight, and poses questions for traders, regulators and exchanges alike about just who or what caused such a major turnaround in the market.
Explanations range from a “fat finger” trading error or a high-frequency computer trading program run amok to a concentration of stop-loss orders being triggered or a single large trade by a hedge fund selling up to 10 million barrels of crude in a single clip, though no one appears to know for certain.
LONDON (Reuters) – Whatever the precise trigger, the sudden plunge in Brent prices on Monday is a timely reminder that liquidity is discontinuous, even in a market as deep and heavily traded as crude oil.
Markets can switch from quiet calm to a raging storm with frightening speed for any reason, or no rational reason at all.
LONDON (Reuters) – Roll returns rather than spot price movements have been a much more significant source of profits and losses for commodity investors over almost any time horizon.
Yet most investors still formulate their strategy in terms of outright price moves rather than the spreads, missing out on the most important source of long-term performance.
LONDON, Sept 14 (Reuters) – Commodity prices could come
under severe pressure if the U.S. Internal Revenue Service (IRS)
decides to revoke previous rulings that have allowed mutual
funds to pour over $50 billion into commodity derivatives
through subsidiaries in the Cayman Islands and structured notes
while remaining exempt from corporate income tax.
“The controlled foreign corporations are corporate fictions,
offshore shams, paper exercises whose sole purpose is to make an
end run around the legal restrictions on commodity investments
by mutual funds,” Chairman Carl Levin complained at a hearing of
the Senate Permanent Subcommittee on Investigations in January.
LONDON (Reuters) – Concern about triggering another rise in oil prices is unlikely to deter the Federal Reserve from embarking on another round of quantitative easing.
Officials believe the stimulus from lower interest rates will outweigh the drag on growth from higher fuel costs, as my colleagues Jonathan Spicer and Matthew Robinson have explained (“Benefits of QE3 seen outweighing oil sting” Sep 12).