7. Futures, commodities and energy

Futures, commodities and energy

Futures curves, positioning, oil, power, GPU hours and macro days.

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  • 7 lessons
  • 29 min
About this chapter

This chapter teaches the commodity desk's world: futures and their curves, who holds positions, the weekly inventory reports, two new "commodities" (grid power and GPU hours), and how stocks react on macro days.

What you will be able to do

  • Read a futures quote: the contract month, the units, the change.
  • Read a futures curve, say contango or backwardation, and explain what rolling costs.
  • Read the weekly Commitments of Traders positioning report.
  • Read the weekly oil and gas inventory reports against last year and the five-year range.
  • Read grid interconnection queues and GPU rental prices.
  • Measure how a stock reacts on CPI, jobs and Fed days.

How the chapter is built

Diagram: Futures from zero: FUT leads to Curves and rolling: CTM; Curves and rolling: CTM leads to Positioning: COT; Curves and rolling: CTM leads to Oil and gas inventories: DOE, NGS; Oil and gas inventories: DOE, NGS leads to Power and the grid: POWER; Power and the grid: POWER leads to GPU rental prices: GPU; Futures from zero: FUT leads to Macro days: MDAY.
Wide diagram: scroll sideways to see all of it.

Five words to know before starting

commodity
a raw material traded in standard units: oil, gas, gold, corn
spot price
the price for delivery now
futures contract
an agreement to buy or sell later at a price fixed today
contract month
the month a futures contract ends
inventory
how much of a commodity is in storage
  1. 01Futures from zero (FUT)A futures contract is a standard, exchange-traded promise to buy or sell a set quantity on a set month at a price agreed today, settled with daily margin, and FUT shows the front months across markets.4 min
  2. 02Futures curves and rolling (CTM)A futures curve lines up every contract month of one commodity, rising (contango) when storing costs money and falling (backwardation) when it is scarce now, and CTM shows it with the cost of rolling.4 min
  3. 03Who holds the futures (COT)The CFTC's weekly Commitments of Traders shows how many futures contracts speculators, hedgers and small traders hold long and short, and COT shows it per market with history and percentiles.4 min
  4. 04Oil and gas inventories (DOE, NGS)DOE and NGS show the weekly US government counts of crude, products and natural gas in storage against last year and the five-year range.4 min
  5. 05Power and the grid (POWER)POWER collects the public queues of power projects and large electricity users waiting to connect to the grid, with their history and outcomes.4 min
  6. 06GPU rental prices (GPU)GPU collects published hourly rental prices for AI chips by model and price basis, with medians and history, so compute can be tracked like a commodity.4 min
  7. 07How a stock reacts on macro days (MDAY)MDAY compares how a US listing moves on CPI, jobs and Fed decision days with a normal day, over up to five years, and lists every release day with its move.4 min

Educational material about reading market data, not investment advice.