No, that's about right. The only thing to keep in mind is that the hundreds of 2009 dimwit usernames you're seeing are actually about 6 or 7 guys who are creating dozens each. Do they have a life? Apparently not.
Thanks. So basically the cost of storing, shipping, insuring, etc, is about $1 a barrel. Yeah, I know I can do the spread. I was wondering about the sure thing
thanks for that explanation. I had bits and pieces of it put together, but that was very concise. that is why spend time at et.
It's actually less when the conditions are normal, but you need to understand that the companies providing the tankers, storage, transport, etc. will jack up their prices when demand rises and the contango starts attracting players. If you don't get your storage secured in time, you can get screwed big time. That's why the big banks have been acquiring tankers or retaining long term leases to make sure they don't get stuck.
Yes, after all, these banks were so profitable... They deserve $100 million for making $200 million? What kind of nonsense is that? See if they took on the full responsibility of operating their own fund, and raising the kind of capital that the bank provided, and took on all the risk and got that kind of return. How do you know it is not the volatility of the energy instruments that caused a lot of the return? A lot of these bigtime traders are WAY WAY overrated.
Yes, because banks using discount window capital to acquire oil tankers and arbitrage contango opportunities doesn't just smack of inefficiency. [/sarcasm] This is exactly the problem with commodities futures markets. If speculation drives up the futures price, it presents an arbitrage opportunity. BUT GUESS WHAT, buying all the oil in the spot market drives up the spot market. And then what if you have another round of speculation because 'omg prices are skyrocketing!!!!' And futures increase. And then the spot increases due to the arbitrage play. And then what if you have another round of speculation because 'omg prices are skyrocketing!!!!' And futures increase. And then the spot increases due to the arbitrage play. And then what if you have another round of speculation because 'omg prices are skyrocketing!!!!' And futures increase. And then the spot increases due to the arbitrage play. And then what if you have another round of speculation because 'omg prices are skyrocketing!!!!' And futures increase. And then the spot increases due to the arbitrage play. And then what if you have another round of speculation because 'omg prices are skyrocketing!!!!' And futures increase. And then the spot increases due to the arbitrage play. And then what if you have another round of speculation because 'omg prices are skyrocketing!!!!' And futures increase. And then the spot increases due to the arbitrage play. And then what if you have another round of speculation because 'omg prices are skyrocketing!!!!' And futures increase. And then the spot increases due to the arbitrage play. And then what if you have another round of speculation because 'omg prices are skyrocketing!!!!' And futures increase. And then the spot increases due to the arbitrage play. And then what if you have another round of speculation because 'omg prices are skyrocketing!!!!' And futures increase. And then the spot increases due to the arbitrage play. And then what if you have another round of speculation because 'omg prices are skyrocketing!!!!' And futures increase. And then the spot increases due to the arbitrage play.
LOL. That's pure spec. The contango oil arbitrage trade will stop futures from increasing but won't stop spot from rising. In the end the two should be the same price as the cost to store the oil.
Agreed 100% And this is why it's just about pointless to continue being a part of this website. And given Baron's most recent comments down in the Feedback forum, nothings going to change.