BigArm25

Contango: How It Affects Crude Oil ETFs and ETNs

then you just own a higher priced oil with more downside.....

Despite Oil's Slippery Slope, Consider USO

Yea it's this crazy law called supply and demand. How do you manage a 5-6 dollar (12%) cost of roll each month? Oil price has to go up $50 dollars per bbls to cover the cost of roll? Shouldn't you wait until the market shows reduced cost of carry?

BigArm25


On Jan 13 08:03 AM Roger Knights wrote:

> Oil's price movement this year hasn't made sense from a market perspective,
> so I'd be wary of thinking it's put in its bottom just yet. Even
> though it's crazy, it could go $10 lower, if there is some crazy
> factor moving its price.

As Russia Tests the Waters, Oil and Gas Showdown Looms

Peakers and Supercyclers don't understand how "extreme" energy prices collapse themselves by collapsing demand and the economy. Simply, they are a massive tax on the consumer, who although always slow to respond to bad news.. do respond. Further the syphoning of the currency to 'petro-dollar' havens-economies where it is further saved or not invested wisely, significantly slows the 'velocity' of money, helping to facilitate things like the current credit crisis, and expose fragile industries like housing, autos..

Surely the supply of oil is finite, but even at todays $65 it will inspire many alternatives and MUCH conservation. Extremes in prices as we have just experienced (like we did in the late 70's/early 80's and demand collapsed by.... 25% IN THE USA!!!!!) are not good for long term oil/energy prices.

The huge imbalance of priorities between producers and suppliers makes it inevitable that other less economic alternatives will be found before the supply of oil runs out... the suppliers are just too unreliable - consumers cannot run their economies that way.... and won't.

Buried IAEA Report Could Give Oil a Big Boost

hardly profound or new, this has been going on for so long and so over hyped that traffic jams push it back in the pages