CME floor traders are losing their "hedger" status and must now come up with more money to maintain a futures position. They either have to come up with more capital or reduce their position size by May 7.
Nah, he was long into the last earnings release and wrote equally nervous prose then.
If anyone thinks HFC is heading toward such a disadvantaged situation, I suggest you go read the VLO earnings transcript. In many ways, of the independents, they would be the natural beneficiary of inland crudes rushing toward price parity with waterborne crudes, and in particular, the return of the heavy waterborne crude discount. But their mgmt doesn't see it happening, and are talking about at most 10% shift toward advantaged sweet (not heavy) crude pricing until 2014-2015.
The era of discounted heavy crudes from the middle east is past and won't be seen again.
The Bakken sweet crudes will trade close to WTI until the Alberta upgrader comes back online and then late summer some new cokers start coming online in the Midwest, replacing WTI/WTS with Canadian WCS.
The advantage of having refineries sitting right in the producing fields will not go away. And not to leave El Dorado or Tulsa out of the action, the Kansas Mississippian resource in Northwest Kansas and Oklahoma is developing exponentially:
Right now, of HFC's refineries, the weakest margins are at Tulsa. But to remind you all again, Tulsa's output is hedged at a minimum $25 crack for the whole year. That's a very nice base case for the weakest card in your hand.
Because market manipulation still reigns supreme + the big boys watch out for themselves. Should have known better + sold yesterday as I figured the jobs report would be bad + the market would sink. I posted that yesterday but yahoo nuked it. I don't see any major beat on Mon + no special will cause the stock to sink. Ironically, every time they doled one out the stock still sank. Might as well sink with cash in the bank.
The new rules, which will increase the money needed to trade futures for some exchange members, are set to go into effect in 90 days, and not Monday as previously expected.
The CME Group, the U.S. top exchange for futures, said in a news release late Thursday it had sought and received the 90-day extension to “work with the CFTC to address member-customer concerns.”
I.E. we need to give our big customers time to unwind those losing positions so watch for more manipulation in the crude pits until they get it done.