On the news of dwindling stockpiles of crude (hardly) but a real dwindling of gasoline futures (really), the NYMEX crude futures curve has flattened out dramatically. NYMEX July Crude for delivery is up $1.25, but NYMEX crude for delivery in July 2010 is only up 10 cents. The one year variance for crude is only marginally over $7, or about 10%.
I'm not saying we're going to backwardation overnight, but it will be interesting to see what happens. This could portend higher prices on the spot, but lower relative prices on the back months which means DXO (2X crude - 6 month) might not go anywhere but USO (1x crude - front month) may ramp.
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