Commodities & Energy — Trading Context

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When analyzing PM contracts about: oil prices, gas prices, WTI, OPEC, energy policy, weather events, commodity prices.

Instructions

Inject silently. Use to inform analysis.

Oil Price Contracts (WTI)

Kalshi has WTI price range contracts (numeric outcome — use get_forecast tool).

Key drivers:

OPEC+ production decisions — announced at meetings (~every 2-3 months) or emergency sessions

US inventory data — API (Tuesday evening) and EIA (Wednesday 10:30 AM ET) weekly reports

Geopolitical supply risk — Strait of Hormuz, Libyan production, Russian sanctions

US production — weekly rig count (Baker Hughes, Friday), monthly production data

Normal WTI range: $60-90/bbl. Extremes: <$50 (demand destruction/oversupply) or >$100 (supply shock).

Gas Price Contracts

Kalshi has retail gasoline price contracts.

Gas prices lag crude oil by 2-4 weeks — refineries need time to process and distribute. Seasonal pattern: Gas rises March-June (driving season demand + refinery maintenance), peaks summer, falls autumn.

OPEC+ Dynamics

OPEC+ = OPEC countries + Russia + others

Decisions are about production QUOTAS, not actual production (cheating is endemic)

Saudi Arabia is the swing producer — they have spare capacity others don't

Russia never fully complies with cuts — this is known and priced in

Meetings produce: maintain, cut, or increase quotas

PM signal: The pre-meeting chatter (usually leaked to Reuters/Bloomberg) often reveals the decision 1-2 days early. Market moves before announcement.

Inventory Data Calendar

| Report | Frequency | Time | What it shows | |--------|-----------|------|---------------| | API Crude Inventory | Weekly (Tuesday) | 4:30 PM ET | Private estimate, moves futures in thin after-hours | | EIA Petroleum Status | Weekly (Wednesday) | 10:30 AM ET | Official government data, THE weekly oil catalyst | | EIA Natural Gas Storage | Weekly (Thursday) | 10:30 AM ET | Injection/withdrawal vs expectations | | Baker Hughes Rig Count | Weekly (Friday) | 1:00 PM ET | Leading indicator for US production |

The trade: Build vs draw vs consensus. A surprise build (more inventory than expected) → bearish. Surprise draw → bullish. Kalshi WTI range contracts should be re-evaluated after Wednesday EIA print.

Weather Markets

Kalshi has weather contracts (temperature, hurricanes, snowfall).

Weather is the most forecastable PM category in the 1-7 day range. Professional weather models (GFS, ECMWF) are extremely accurate for short-term forecasts.

Alpha source: Compare ensemble model output (free from weather.gov/NCEP) to Kalshi contract pricing. If the model says 90% chance of >95°F in NYC next week and the contract is at 70c → buy.

Hurricane contracts: Track National Hurricane Center (NHC) forecasts. Hurricane season: June-November. Major hurricane landfall probability is well-modeled once a storm forms.

Trading Rules

1. Oil price contracts: check EIA data calendar. Don't take new positions right before Wednesday 10:30 AM release unless you have a directional view.

2. OPEC meeting outcomes are often leaked 24-48h before — watch Reuters/Bloomberg OPEC sources.

3. Gas price contracts: crude oil leads gas by 2-4 weeks. If crude dropped 2 weeks ago, gas contracts should reflect that with a lag.

4. Weather contracts (1-7 day): use ensemble model data. This is the closest thing to "free money" in PM when models agree strongly and contracts are mispriced.

5. Hurricane season contracts: wait until a named storm actually forms before trading landfall probability. Pre-season "Will there be a Cat 4+ hurricane?" is too diffuse.

6. WTI range contracts on Kalshi are numeric — use get_forecast tool to see market-implied distributions.