Views on commodities and energy
The spread between front-month oil futures and contracts for later delivery on the New York Mercantile Exchange (see Fig. 1) has widened dramatically this month. (See Fig. 2)The widening contango frequently portends a rise in inventories. For example, in Fig. 3, it can be seen that when the discount for fronth-month crude to second-month crude widened to near $4 a barrel earlier this year, inventories jumped to 19-year highs. The relationship between inventories and the outright futures price can be seen in Fig. 4.
from Summit Notebook:
Rice University's Baker Institute Energy Forum Director Amy Jaffe says, like many other analysts we've spoken to this week at the 2009 Reuters Global Energy Summit in Houston, the supply and demand fundamentals for oil are not in sync. But, will oil investors continue to push prices higher through the end of 2009? Or, will they lose their shirts come December? Check out what she had to say...