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FxWirePro: Calendar spreads using advantageous CME WTI futures contracts to hedge crude oil price risks

The WTI crude oil prices extend their recent recovery upto the current $71.07 levels, with WTI particularly supported by hurricane risks. Major bearish barrier is foreseen at around $73.50 levels.

Apparently, the energy commodities analysts project more than one million barrels a day of Iran's roughly 2.5 million barrels a day of exports could be at risk. While Washington has contended that countries eliminate their purchases of Iranian oil -0.68%.

Trade recommendation:

To facilitate market participants to more easily manage crude oil price risk, the Exchange provides a trading instrument to complement
the futures contract known as Exchange of Futures for Physicals (EFP). 

On hedging grounds, we maintain short positions in ICE Brent calendar spread (short ICE Dec 18 vs ICE Dec 19), short NYMEX WTI Sep/Oct’18 time spread and short NYMEX WTI Oct’18 versus long Brent Oct’18 contract.

An EFP allows the exchange of a futures position for a physical position in the underlying cash market. Such a contract is optimal to deliver or receive crude oil from a specifically desired counterparty, that does not necessarily conform to the delivery location or grade specification of our WTI futures contract. 

EFPs, which can benefit both sides of a transaction, account for most of the deliveries
made against the futures contract. Rather than accepting a randomly matched partner, as would occur through normal clearing procedures, EFPs allow traders to choose their trading partners while retaining anonymity in the market at large. 

Reliable Central Counterparty Clearing House: The renowned CME leads the commodity space in providing a comprehensive set of risk-management services — serving clients with the high level of the security and confidence market participants need to operate, invest and grow. For every trade executed on the Exchange — whether on the floor, on the screen or using off-exchange transactions cleared through CME ClearPort.

CME Clearing acts as the counterparty to every trade to substantially mitigate counterparty credit risk and virtually guarantee the financial soundness of both parties. By being at the center of every transaction, we can protect everyone’s interest and ensure the integrity of the marketplace. 

Currency Strength Index: FxWirePro's hourly EUR spot index has shown -17 (which is neutral), while USD is flashing at 71 (bullish), while articulating at 11:12 GMT.

For more details on the index, please refer below weblink:

http://www.fxwirepro.com/currencyindex

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