Traders Bet Ukraine Tensions Won’t Impact Oil

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May 27 (Bloomberg) -- Spectrum Asset Management’s Michael Gurka and Author of “Oil’s Endless Bid” Dan Dicker discuss the price of oil on Bloomberg Television’s “In The Loop.” (Source: Bloomberg)

-- brent crude contracts are trading at a four-day low after the ukrainian elections where petro poroshenko has vowed to wipe out the separatists.

For more on the commodities, i am joined by dan baker.

Dan, why is the ukrainian election moving oil prices more?

Derek dooley will things going on, and most of what is going on is in this country where there is an increase in supplies, where we are rushing into cushing and the gulf coast.

What that is doing is forcing crude prices here in the united states toward global prices, so instead of having a global price that is reacting immediately to geopolitical issues, for example, in the ukraine, instead you have a domestic price that is acting strongly and starting to catch up to the global prices, which is still very strong.

Nymex crude is now at a five-week i am the moment.

Michael, how are you trading oil?

As i look at weekly charts because it makes such a difference, i see a double bottom down at 98 and is the same thing i saw in 2008. if we can stay within a tight range it looks to me like a bull flag.

There will be an upside and i've seen a 10% move already and that is one of the reasons we are targeting 106, 108, and they were no man's land not that long ago.

Oil futures are put in dollars per barrel, but each contract controls about 1000 barrels.

That means if you buy at $100 for -- one of -- 104, and it sells and 100 six, michael would have made a profit of $2000. dan, what do you think of the forecast?

I think michael is right.

The risk is to the upside and because of the flood of crude into the gulf coast, it is bringing domestic prices back to the global price, and the magnetic pole will get the spread common, and we will see prices here at wti go closer to the 2010 price.

Barclays put out aoil volatility will remain a record low because of the supply.

What does tame volatility look like to you when it comes to oil?

You get a tight range where prices trade, but that does not mean prices cannot trend, in fact they have been trending higher.

Libyan supply is getting cut.

We still have a lot of interesting developments with the petro poroshenko elections in europe.

The new russia-china gas deal, all of this plays in.

We hear future traders talk about the life of the contract.

Can you explain what they mean?

This is the differentiator between stocks and commodities.

Futures you have monthly contracts, and when the month is up, the contract is over, so you have to be aware of that.

Once it is over, you have to get out.

Dan and michael, thank you for joining us.

Betty, we will send it back over to you.

Thank you so much, scarlet fu, on the markets.

We have breaking news on durable goods.

Michael mckee has those numbers for me.

I am taking a look, and it looks like a reasonable number.

Durable goods orders on the month rise by .8%, and the forecast was 8.7 declined.

What is interesting is there -- .7 declined.

There is a history of a climb in the first quarter.

We have been waiting for companies to start adding to their capital spending.

We do watch capital goods, nondefense, a long way of saying a business proxy, that was down

This text has been automatically generated. It may not be 100% accurate.


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