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.
The Commodity Futures Trading Commission has quietly bumped up the proportion of oil futures it thinks are held by speculators after going over its data. The agency now thinks speculators held 48 percent of oil futures and options -not 38 percent as it previously thought.
The CFTC is not providing much information about the revision, saying only it followed consultations with the futures industry.