Crude futures of 2010

G

Galatia

Interestingly, they're trading at 96.68 (Dec 2010). So aren't they supposed to be higher? I mean everybody is talking about peak oil but crude futures of 2010 or even 2016 are trading below 100$. What the heck is that? Am i missing sth.?

Could someone educate me about that?
 
Quote from Galatia:

Interestingly, they're trading at 96.68 (Dec 2010). So aren't they supposed to be higher? I mean everybody is talking about peak oil but crude futures of 2010 or even 2016 are trading below 100$. What the heck is that? Am i missing sth.?

Could someone educate me about that?
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The market is clearly stating that "peak oil" is for fools.

But then again, without these fools, who would we transfer the risk to?
 
These days, it has a lot less to do with the underlining commodity, and a lot more to do with a world awashed in cash, reacting to an increasingly uncertain geopolitical climate, while having access to more global trading instruments than ever before.
 
So i've done a little search on contango and backwardation and i found that;

Backwardation is a market condition where spot prices exceed forward prices. Contango is the opposite condition, where forward prices exceed spot prices. The terms are most commonly used in oil markets but are also applied in certain commodities and energies markets. In oil markets, the prevailing condition may reflect immediate supply and demand. If crude oil is contango, it may indicate immediately available supply. Backwardation can indicate an immediate shortage. Anything that threatens the steady flow of oil around the world, such as imminent war, tends to drive the oil market into backwardation.
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So that makes me thinks that;
  • Peak oil is really for idiots
  • Market nowadays is pricing an possible and sudden Iran war in one or two years which is a hardcode threat for oil flow from ME region.

Am i right now?
 
Quote from arealpissedgoy:

The market is clearly stating that "peak oil" is for fools.

But then again, without these fools, who would we transfer the risk to?
More...

IMO the main reason oil is in backwardation is hedging of a great number of development projects.

As for "these fools"... sounds like you have the whole situation figured out Areal. Guess you are going to make a fortune selling these contracts - oops you didn't try that already did you?
 
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