(snip)"Oil Contango Doubles in 2011 Recovery Betting With Frontline Ship Demand
By Asjylyn Loder - Sep 8, 2010 10:18 AM ET
The spread shows that traders are betting the economy will keep weakening through 2010 before improving in the first half of next year.
Oil traders are showing increasing confidence that U.S. economic growth will rebound next year as they take advantage of the widening gap between current prices of crude and contracts for delivery six months from now.
The price advantage, or contango, to buy and hold crude more than doubled to $5.76 a barrel last month from $2.60 at the end of July, as contracts for October delivery fell 9.4 percent and March dropped 5.3 percent. ConocoPhillips hired the tanker TI Europe for storage in the Gulf of Mexico, according to data on the website of RS Platou A/S, an Oslo-based shipbroker.
Crude, gasoline and heating oil inventories reached a 20- year-high last month as the U.S. Commerce Department said the economy probably expanded at a 1.6 percent annual pace in the second quarter from an initially reported 2.4 percent. The gap, or curve, between the price of oil for immediate delivery and for March has increased to a three-month high, making storage a profitable wager on an American rebound next year. "(snip)



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