Was A Large Energy Fund Just Crushed?

From The Macro Tourist:

Crude oil. Ugly move lower over the past two weeks.

The market pundits will try to explain the price action. They will offer evidence of President Trump’s tweet as the catalyst for the sell off.

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Or they will point to the decline resulting from market participants’ belief the global economy is about to roll over.

And if they don’t use that excuse, they will trot out the breakout in the US Dollar Index.
Either way, the chart looks about as attractive as my moldy 30-year old hockey equipment.

Although I don’t deny these three factors played a role in oil’s recent demise (especially the global slow-down narrative), I contend that these were just excuses.

The truth of the matter is that there is a Behemoth out there that was long crude oil against short nat gas (along with short nat gas spreads).
Don’t believe me?

Although I acknowledge it has become mildly colder over the past couple of weeks, do you really believe that is was enough to spike the front nat gas future from $2.75 to $4.03?

A 46% increase in a couple of months. C’mon - that’s not weather.
Still don’t believe me that someone is offside? If you can come up with a fundamental reason for the March / April 2019 Nat Gas spread to spike like this, then by all means, please pass it along.

Look closely at that chart. The spread has bounced around 25 and 40 cents for the past three years. Now, in November, a full 3 months ahead of the front month coming due, they have decided it should trade at an 82 cent premium?

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