| Not all these contracts will need to be delivered, as speculators in particular tend to roll them over. But some long positions are users, and have full intention of taking delivery. And some of the short positions are producers, who may still intend to deliver product to cover. However, at present if producers plan on delivering to meet their June obligations (LT is June 28) they sure have been taking their sweet time about it. If there was plenty of inventory, then a shortfall in delivering versus taking delivery, would just wash out in the end. But, now you just see it reduced all the time, not enough comes in. I just don't think the market is even remotely balanced, and there is no longer slack for that. There very well could be a failure to deliver in June, or even more likely in July (the active month). You'll have to ask the Comex (or LME) what their policy is, but the credibility of their whole market (including other futures) is going to be shaken, if it's just IOUs, promises and more synthetic economics (allowing open ended shorting, with no intention to deliver). If someone actually wants real product, there should be no ands, ifs, or buts about it. These exchanges have gotten so fat on trading synthetically, that they've failed to remember this is a real commodity. |
