There's a term traders use when the price of a commodity like oil has fallen because of oversupply but seems guaranteed to rise again.
It's a market that's "in contango," says Brenda Shaffer, an energy specialist at Georgetown University. "It almost sounds like a sort of great oil dance or something."
And Shaffer says that some oil speculators see an oil market that is in contango in a major way.
"Some people out there think that oil is going to get more expensive so it's worthwhile now to buy oil, lock it in, and have those supplies, have them stored and have them available to sell a few months down the line, if you actually believe it's going to go up," she says.
The last time this happened was in 2008-2009, after the price of crude oil plummeted to about $35 barrel amid a global downturn. At least 70 million barrels were stored on tankers until the price rebounded.
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4 comments:
Drive a hybrid and fudge them.
U.S is drill more oil than ever, (Thanks Obama? drill baby drill?)... However, it is not being used in the US? Sold to highest bidder on global marker..
Lets stop drilling and start using alternative energy (SOLAR)
Instead of giving oil companies a bunch of money (tax breaks/subsidies)... lets give money to put solar panels in every city, neighborhood, and park
Yes, lets use solar panels or we could just use hamsters on a wheel, they would be more effective! Then there id the prius , a vehicle that's battery chemicals are mined in Canada then shipped to China to be made into a volital foam , then shipped to japan where it is put into the batteries, so it has travled more than the space program, that's real green! Then we want to blame the oil companies for making a profit, for shame! Lets see they do all the research, drill the oil, process the oil to fuel, ship it then sell it , yet the government makes more money per gallon than the oil companies, yet they have not done a thing to earn it!
Solar and electric battery are not ready for prime time yet. Nothing delivers the energy of oil and gas.
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