Crude Contango Slips – What It Means For Storage

Andrew Hecht, Technomentals Summary Term structure provides amazing clues. Term structure in oil has moved. Tanker stocks take it on the chin. Contango – chicken and egg? Why the current level of spreads will have a big impact. The price of crude oil has recovered — the energy commodity just posted its eighth consecutive week of higher prices. Crude moved from lows of $42.03 in March to highs of $62.58 last week, an increase of 48.9% from the lows. Volatility is picking up in crude oil and it looks like there is more to come on the horizon. When it comes to crude oil these days, the future path is not all that clear. Bullish and bearish fundamental and technical factors are pulling the price in both directions and the ultimate outcome is not so clear. This is a prescription for wider daily trading ranges and an increase in trading activity. The price of crude oil, perhaps the most political and ubiquitous commodity traded, will affect not only other markets but government policy as well as geopolitical issues as well. Meanwhile, lower oil prices earlier in 2015 created an opportunity for well capitalized traders to enter into profitable low-risk cash … continue reading

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