Macro Blue

@CRUDEOIL231 Why are you so pissed? Because you puked your weak length at the lows? If you bought the lows, you would be thanking him.

Barak Ravid: A total loser who pumps out fake news to aid insider trading and government propaganda, all while dodging legal accountability and lacking the balls to face criticism. A complete piece of trash. This time is no different. He’s been blabbering about peace since Friday, but in reality, Iranian missiles are raining down on Fujairah. Aren't you ashamed of yourself in front of your own children?

@ALikhodedov In real life trading though, the ‘Hormuz crisis is end of world’ crowd would have been stopped out their trades at $90 given how convicted they were at $110. The only people who could buy at $90 were the ones who were flexible enough.

Have not heard recently from the "Hormuz crisis is over" crowd - they were so busy taking victory laps and giving "pro tips" on April 8th and 17th and seem strangely quiet today.... Great call - would only cost you a $25-30 missed rally in Brent. Btw, you did not need to believe that the reopening deal would stall to think that Hormuz is not fully over and Brent sub $90 is clearly a "buy". Just minor understanding of logistics of SOH flows normalisation / production restarts and some barrel counting would be enough. PS FWIW higher stress (incl. higher oil prices) does bring the resolution closer - I do hope we will reopen soon - as it is almost May and we are losing 13mbd+ of production per day and will at not very distant future start having a "flow" problem (inability to draw inventory fast enough, resulting in much larger-scale demand destruction). While crude will stay pretty high in any scenario in my view it is worthwhile to reduce length / roll into the back of the curve (I am still long some, but did reduce 2/3 of my position).

@CRUDEOIL231 It matters because this determines how much they will overproduce post war even at lower price set. What kind of expert are you if you always apply your own bias into new information?

Shut up you ppl talking nonsense about a chicken game. The UAE’s required production for May under the OPEC+ DoC is 3,447kb/d, yet their March production was only 1,892kb/d. It’s not that they wanted to increase production and couldn't; it’s physically impossible to ramp up output right now bc the SoH is closed. So if the goal were simply to increase production, there’s no need to leave OPEC. They are under-producing by more than 1.5mb/d compared to their quota. As long as they are physically able to produce it, they can increase output enough while staying within OPEC+. I think they either want to join the war or are just fed up with the helplessness of the cartels, especially Saudis. Saudi did nothing for the UAE while they were getting hit. Even when the UAE mentioned the possibility of entering the war, Saudis remained completely silent. If I were them, I’d be furious too. #oott #iran

@tmaxftw @PauloMacro He should probably add an IRGC flag

@PauloMacro Pierre needs more flags in his handle. That will build more European gas capacity.

Savage

@AndreasSteno How dare you? He was up 30% in March and was the No. 1 hedge fund in the world!

*ANDURAND LOST 52% IN APRIL FIRST HALF AS CEASEFIRE HURT OIL BET Are people paying 20% performance for Pierre Andurand to be max levered long oil always? It seems like it

@HaydenDrum @AndreasSteno @AdiSurreyEnergy With a toll

@MacroBlue33 @AndreasSteno @AdiSurreyEnergy I can reply to his posts

There is NO disconnect between futures and physical. There cannot be, by definition. This is the way they were meant to work.

@AndreasSteno @AdiSurreyEnergy That would be shocking for someone who doesn’t allow replies

@AdiSurreyEnergy So you are telling me that HFI Research does not understand the only sector/topic he covers? 😂

@AndreasSteno On a more serious note, it’s time to flip on your view so that those fraudulent research accounts won’t be able to attack you again when market reverts.

On a serious note. Of course we would see some back and forths before the deal - it is to be expected

Lol

@AndreasSteno Not a bad time to change your opinion actually :)

I basically still think the crisis is over

@Scouting4Gold How about a 3rd option for @HFI_Research?

I believe Araghchi is working for the US.

@JavierBlas Javier finally has got a sense of humor!

It turns out that oil financial and physical markets do converge -- just not in the way that many were expecting. Dated Brent is now below $100 a barrel (from $145 last week), and physical differentials in the key pricing window have plunged >$10 from a few days ago.

@AndreasSteno @Rory_Johnston Agree. But need to highlight HFI as well for closing the comments area for longer than SoH! Wait, he charges a toll for people to leave comments??

Btw want to highlight @Rory_Johnston as well. Even if I have disagreed a lot with him the past weeks, I think his level of analysis is very solid - and a good guy 🙏

Javier has proven a must follow through this. And also clearly willing to listen to markets and adapt to changes. Very solid guy!

@dMacro_dBS It’s still trading at $140 in the simulation that they live in!

Guys, help ASAP, where is Dated Brent trading???…. I’m joking I still don’t care 😂

@AndreasSteno Can we give HFI for the ‘best forecaster of the year’ award because let’s be fair he did say oil financial and physical will converge?

@ALikhodedov @stevehou Also, my point is that the original post was most likely meant to be sarcastic. The point being if people were buying crude at $110 to bet on ‘convergence’ to $140 Dated Brent at the time, now they have lost $25 and physical market is also lower and more.

@ALikhodedov @stevehou Sorry didn’t mean to say it was your view. There are just many guys out there who pretend to be ‘experts’ in oil and kept using ‘physical vs paper gap’ as the thesis to talk retail people into long oil.

why not buy oil in the paper market and sell it in the physical market and pocket the difference? how about that for an idea?

@ALikhodedov @stevehou You understand his point right? The guys who were buying crude at $110 hoping it to converge to the Dated Brent price around $140 at the time was just wrong. You cannot say you are still right when these guys have lost $25 on the trade.

@stevehou Why not study basics and understand why pocketing the difference between physical oil loading in US gulf or Hound Point or landing in Asia today and paper (Brent) - delivered in North Sea in June or WTI - in Cushing in May is impossible? how about that for an idea?

@AndreasSteno The sentiment out there is that HFI has totally nailed it: physical and financial crude have converged! (Just the other way around…)

Remember when I laid out this thesis 10-11 sessions ago? And how everyone called me an idiot? Having said that, we soon need to see some further sequential progress or else the momentum will fade

@dMacro_dBS Asking for a friend who bought Brent at $110: if physical crude goes down to $90 in the coming weeks, does June Brent still need to rally to $130 to converge to the old physical Brent price that was being posted on X last week?

The crude oil enigma

@CRUDEOIL231 Can Physical Brent drop to $80 though? Or you assume that is is a fixed number at $130?

What is the North Sea physic mkt, and how should the gap between the paper and physical markets be resolved? Every time I post about the physical market, I see a lot of complaints about why oil prices aren't rising further. Many ppl even criticize me, claiming I’m not explaining things properly. First, I’ll summarize the basic components of the North Sea market. ICE Brent Futures: A financially settled paper contract used primarily for broad directional hedging and speculation without the intention of physical delivery. EFP (Exchange of Futures for Physical): A swap that acts as a bridge, allowing a trader to convert a paper futures position into a physical cargo contract. Forward Brent: A standardized OTC physical swap for future delivery. It represents actual oil but remains non-dated bc the exact loading schedule is not yet determined. Dated Brent: The global benchmark price for physical crude. It is assessed daily by agencies like Platts based on actual trades of the most competitive grade within the BFOET+WTI basket, triggered once specific loading dates are confirmed (typically 10-30 days prior). CFD: A short-term swap representing the price difference between Forward Brent and Dated Brent. It is used to plot the physical forward curve and assess whether the market is in contango or backwardation. DFL (Dated to Frontline): A swap that links the physical Dated Brent assessment directly to the front-month ICE Futures contract, managing exposure between the physical and financial markets. Diff (Grade Basis): The premium or discount applied to a specific physical cargo relative to the Dated Brent benchmark. Driven by crude quality, logistics, and refinery demand, this unhedgeable spread is where physical traders generate profit. This alone should be enough. From there, I’ll explain how the gap between the paper market and the physical market actually closes. A massive divergence between Dated Brent (physic) and ICE Brent futures (paper) typically indicates acute near-term physical tightness relative to forward expectations. If Dated Brent remains at $120-130/bbl leading into the expiration of the front-month ICE Brent futures contract (currently around $100/bbl), the futures contract must converge toward the physical price. The convergence is not optional; it is mathematically enforced by the exchange's settlement rules and market arbitrage. This operates through three primary mechanisms: 1) Cash Settlement via the ICE Brent Index ICE Brent futures are cash-settled upon expiration and do not involve physical delivery. Expiring contracts are settled against the ICE Brent Index. The Index is a calculated average of trading activity in the relevant physical Forward BFOET(Brent, Forties, Oseberg, Ekofisk, Troll)+WTI Midland market during the final trading days of the futures contract. Bc Forward Brent and Dated Brent are intrinsically linked, a physical market sustaining $130 will generate an ICE Brent Index near $130. Consequently, any futures positions left open at expiration are forcibly settled at this higher Index price. 2) The Arbitrage Channel (EFP Mechanism) If a $30 spread exists between paper and physical markets, traders will immediately exploit the arbitrage using the EFP mechanism. Traders buy the undervalued ICE Brent futures at $100 and simultaneously sells a physical Forward Brent cargo at $130. They execute an EFP to swap their long paper futures position into a long physical Forward position. The newly acquired long physical position cancels out their short physical position, locking in a profit (minus the EFP swap cost). To execute this arbs on a large scale, traders must aggressively buy ICE futures. This massive purchasing volume forces the futures price up until the gap closes and the arb window is eliminated. 3) Forced Short Covering Market participants holding short positions in the ICE Brent futures market face extreme risk if the physical market disconnects to the upside. Knowing the contract is destined to cash-settle against a $130 physical Index, paper shorts cannot afford to hold their $100 positions into expiration. They are forced to buy back their futures contracts to close their positions before the expiry date. This forced buying—often resulting in a short squeeze—accelerates the upward momentum of the ICE futures price, driving it into alignment with the physical market. Through the combination of final index settlement and active EFP arbs, the paper market is structurally tethered to physical reality as expiration approaches. #oott #iran