Please suggest who is good in this space? There are plenty of reports/blogs which opine on energy price forecasts, but who has a good track record?
THis is a good site for energy info. http://www.edisonthoughts.com/2015/05/whats-marginal-cost-of-oil-supply-60bbl.html
the problem I have is when you find three anyalysts you respect and they are all saying the same thing and you think you have confirmation and then you realise all they are saying is the same thing everybody else is saying and they become the market.
Analysts at Morgan and Goldman are talking about oil (currently about $30) going down to $20. If the futures curve for oil reflects the opinions of prominent analysts, then it would be backwardated. But the curve is in contango (higher prices going forward in time). So there is a disconnect between these high-profile analysts from big trading houses and the market consensus in the futures curve. What to make of this???
No, contango is bearish not bullish. It means people are willing to pay to store to sell oil in the future at hopefully higher prices then what they believe they can get in the present. The market goes into contango to try to incentivize those who are storing oil to sell so they have to offer up higher prices in time. It's very bearish in commodities. A backwardated market is bullish as it means people are willing to pay a premium for oil now then what they could get in the future. To entice buyers to wait, they offer lower prices going forward to relieve demand in the present.
Great post - to put it another way, contango reflects stranded over-supply in the immediate here-and-now.
The contango in the oil futures curve is currently moderate and doesn't appear to offset more than carry costs. It does not look steep enough to attract long term speculators who buy and store the physical. Which brings us back to my original question ... why isn't there any reflection of $20's oil in the near term portion of the curve?