Friday, March 21, 2014

US crude oil export ban and Russian sanctions

Soros today suggested that releasing from the SPR would be the best way to sanction Russia, if sanctioning Russia were really what we wanted to do.  But that Putin would likely retaliate, leading to escalating lose-lose scenarios.  But what about just lifting the crude export ban?  That would raise WTI prices, and also drop other worldwide prices, including Russia's, slightly.  That change would be obviously sustainable, something that would hit Putin without having an inherent timer before conditions revert, as releasing from the SPR would do.  Removing the export ban could simply be framed as beneficial to our own interests (which it is) without ever needing to mention that it hurts Russia's.  That would be a great way to avoid escalating tit-for-tat activity, although it precludes Obama from being able to come across as a tough guy to the American people, which is something he badly would like to do since his approval ratings have been falling.

In sum, while lifting the export ban obviously would be a boon for our economy, something which is often lost on government authorities, the added bonus that it would hurt Russia might serve as a catalyst for them doing so.  I'm watching the WTI-Brent spread closely....

Potential risk to the short Gazprom against russian index trade

Gazprom could do a big deal w/ China, which is supposedly close to fruition.  So I'm out of that trade for now.

Friday, March 7, 2014


I've been keeping busy trading nat gas in the US, coffee/sugar based on the Brasilian drought, corn starting a nice trend looks like, and various stocks like FNMA, which has been ripping.  Been a good few months.

W/r/t Ukraine, gazprom has long been on my hit list as headed to 0 probably eventually, but this Ukrainian conflict should accelerate the issue.  Short gazprom large, long the russian index (RSX is one ETF) smaller to hedge everyday fluctuations.

Also short the ruble.

JGBs have been a pain in the butt, but they appear to be setting up another short setup again w/ the yen dropping more the last few days and JGBs unable to go up for a few weeks.  Will look to buy puts on them again soon.