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1/THREAD: AM I MISSING SOMETHING OR IS MNUCHIN ON DRUGS?

Calling on my physical market tweeps @Big_Orrin @phemsworth for clarify...

Seems like the overnight rally in CL timespreads was driven by Mnuchin committing to "several hundred million" bbl of storage US Gov't will
@Big_Orrin @phemsworth 2/ supposedly provide. I heard that like "We'll be shipping one million test kits by tomorrow" or whatever they said a few weeeks ago - utter nonsense.

But market seems to be taking it seriously. Am I missing something? SPR spare capacity is 75mm bbl and it would take a long
@Big_Orrin @phemsworth 3/ time to fill with lots of competition for the needed pipes. I see ZERO realistic chance of US Gov't building a couple hundred mm bbl of storage capacity in the time needed.

Am I missing something? Why is market taking this seriously? @anasalhajji #OOTT

/END THREAD
@Big_Orrin @phemsworth @anasalhajji 4/ CLARIFICATION: This thread is about WTI TIMESPREADS, not flat price. The spreads rallying overnight seems to imply that pro traders think there's something of substance to this Gov't storage thing. I can't see anything "real" coming out of it beyond 75mm bbl SPR space.
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Erik Townsend 🛢️
@ErikSTownsend
The wildly popular belief that #COVID19 infections peaked at 34,517 on April 4 is patently WRONG!

Both 4/24 (38,958) and 5/1 (36,007) infections were higher.

U.S. new infections are at a STABLE PLATEAU of ~30k/day and show no evidence of decline as of yet.

#DataDontLie
Re-opening the economy is probably necessary, because costs of keeping is closed are so high.

But facts are facts: We have not yet "Flattened the Curve". We've hit a sustained plateau of new infections at a scary-high level that shows no signs of decline as of yet.
Seems like a no-brainer to me: Re-opening the economy, while perhaps the only practical choice, is most likely to at best prolong the plateau and at worst cause a resumption of upward trajectory.

cc: @chrismartenson @DrEricDing @neil_ferguson
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Erik Townsend 🛢️
@ErikSTownsend
1/THREAD: $CL_F FALSE INVENTORY SIGNAL #OOTT

Several weeks ago I predicted that we would soon see much smaller Cushing builds or even a Cushing or product draw. I went on to explain the market would misinterpret that signal. I think it's happening now.

Explanation follows...
2/ Everyone one has been focused on the question of "When will Cushing fill up to the brim?"

The answer is never. It is ALREADY as full as it can get. They need to reserve a few empty tanks for blending operations and for other operational reasons. So reaching working CAPACITY
3/ won't happen.

Think about what happens when something is FULL. No more can be added. So the size of additions falls to zero.

The smaller Cushing build and Gasoline draw reported by API are a very important signal that Cushing is ALREADY AS FULL AS IT CAN GET. No more can be
Read 9 tweets
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Erik Townsend 🛢️
@ErikSTownsend
1/THREAD: #OOTT CRUDE OIL TRADER QUIZ

Please ask yourself, "Who will buy CLM0 futures between April 28 (Thu) and May 19 (expiry).

Think hard about your answer before reading the rest of this thread!

@JavierBlas
@JavierBlas 2/ If your answer involved retail investors buying thru an ETP, forget that. USO, the biggest crude ETP will be out of CLM0 by tomorrow's close. The other ETPs are following suit. ETP inflows will go to later contracts only.
@JavierBlas 3/ If your answer involved anyone trading from a retail futures account, forget it. Most FCMs (futures brokers) have forbidden their clients from opening orders on Jun or Jul CL futs. Retail CANNOT buy this contract.
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