Energy backwardation on fossil fuels as we enter winter...

Overnight

Overnight

Very interesting pattern. CL, HO and NG futures are all in backwardation going into Feb delivery, for the March contracts.

But RBOB is in contango. Wow.

So these folks are all really predicting a mild winter this season. I dunno' man...The NWS has been wrong before. Last winter became summer in no time in New England. We had no spring. Autumn is turning into winter here a bit more normally, but my knees are talking. And they say cold is coming.
 
Two things:

1. Summer travel is critical but currently winter is upon us so draw on near month contracts will be higher.
2. Tax season is here and oil guys are trying to dump their inventory.
 
gaussian said:
Two things:

1. Summer travel is critical but currently winter is upon us so draw on near month contracts will be higher.
2. Tax season is here and oil guys are trying to dump their inventory.
More...

We shall see. A coupe years ago, the temp here dropped to -15 F, and cracked a tail reflector on me car. It got damn cold. Nobody saw it coming. We could have that again this year.

 
Overnight said:
Very interesting pattern. CL, HO and NG futures are all in backwardation going into Feb delivery, for the March contracts.

But RBOB is in contango. Wow.

So these folks are all really predicting a mild winter this season. I dunno' man...The NWS has been wrong before. Last winter became summer in no time in New England. We had no spring. Autumn is turning into winter here a bit more normally, but my knees are talking. And they say cold is coming.
More...

Interesting observation, I need to read up on energy futures structures.
 
We do just an incredible amount of trades INTER market in energy and NONE of them include the prompt couple months...

WTI, Brent, Gasoline, Gas-Oil, HO, NatGas - that forward curve term structure really moves around. All kinds of opportunities. There's just a constant ebb and flow between the supply and the demand dynamic. Most of our trades are butterflies and condors.
 
NG Jan vs Feb slipped to contango, but only slightly. But it is there. Very interesting. Wonder who else's knees are knocking. Granted, it is tough to gauge on last price after RTH. We'll see if it sticks, once this warm front moves off the NE coast by Wed evening.

Why is RB so steeply up on the forward months through March? This is not the driving season!
 
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