Silver Point

Thomas J. Monaco

Independent Insight Provider

Silver Point is a boutique research firm that focuses on the broader financial services sector, with a particular focus on troubled institutions globally. 

Asia Ex Japan

Thematic (Sector/Industry)

United arab emirates Oil, gas and consumable fuels / Thematic (Sector/Industry)

* Oil Price Dislocation Continues: Last week, US West Texas Intermediate (WTI) crude futures closed at a negative USD 37.63 per barrel (bbl) [yes, negative] on what appears to be retail driven margin calls (where selling  accelerated into the close)  - this after the Chicago Mercantile Exchange (CME.US) [CME] agreed to allow contract prices to go negative;* CME Making Changes For USO: USO disclosed that the Chicago Mercantile Exchange (CME.US) has ordered it to limit holdings of June WTI futures contracts to no more than 10,000 due to "regulator concerns about the size of its position". In addition, USO will need to hold more cash in order to satisfy higher margin requirements from clearing members. More regulation is coming, as there is no other choice. When will Singapore Exchange (SGX.US) actually address the oil price dislocation?; and *High Yield/CLO Risk About to Hit The Fan: For the high yield market, there looks to be over USD 200 bn of non-investment grade energy debt with the principal problem residing in the “B3/CCC” leveraged loan market.

* Oil Price Dislocation Continues: Last week, US West Texas Intermediate (WTI) crude futures closed at a negative USD 37.63 per barrel (bbl) [yes, negative] on what appears to be retail driven margin calls (where selling  accelerated into the close)  - this after the Chicago Mercantile Exchange (CME.US) [CME] agreed to allow contract prices to go negative;* CME Making Changes For USO: USO disclosed that the Chicago Mercantile Exchange (CME.US) has ordered it to limit holdings of June WTI futures contracts to no more than 10,000 due to "regulator concerns about the size of its position". In addition, USO will need to hold more cash in order to satisfy higher margin requirements from clearing members. More regulation is coming, as there is no other choice. When will Singapore Exchange (SGX.US) actually address the oil price dislocation?; and *High Yield/CLO Risk About to Hit The Fan: For the high yield market, there looks to be over USD 200 bn of non-investment grade energy debt with the principal problem residing in the “B3/CCC” leveraged loan market.

Oil – Trying To Get Dislocation Under Control