6 Comments
User's avatar
FN's avatar

David, truly insightful. Feel grateful to actually have access to such information. I have a quick question. I know that you had gone long or suggested going long emerging markets reading between your tweets last night. If I was to follow the logic in this article, eventually the ETFs representing the south Asian countries should be short opportunities with a 1-3 month hold given that higher oil prices are going to start affecting their economies and their financial markets. What do you think? Am I misreading you? Any other thoughts?

David Cervantes's avatar

Hi Tnx. No you are reading this correctly.

tuo's avatar

if the analysis based on future px converge to physical spot, why we use brent ( settle in fwd index) rather than wti( settle in physical)?

David Cervantes's avatar

Depending on the exchange (CME/ICE) they may use a diff index so you should check the contract specs to find the reference index.

David Cervantes's avatar

Hi. Brent settles financially vs a physical index.

On BBG it’s BOIL <GO>. First entry.

The nemonic is EUCRBRDT <INDEX> GO.

Panglossian Yield's avatar

David - this is really helpful. A lot of this seems very reasonable and compelling. My question is why are GS of the world are much more sanguine? If we were to take their views at face value, what has to happen for that to be true? I’m asking only because what you’re saying (and what a lot of specialists are implying) has huge implications for risk in the next 1-3 months (vs what the received wisdom is from the research shops at bulge brackets)… and I’m trying to bridge that disconnect because there are very smart people on both sides

Separately, who are oil people on Twitter you trust to not be alarmists?