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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: patron_anejo_por_favor who wrote (63825)6/15/2006 1:57:51 PM
From: gregor_us  Read Replies (1) of 110194
 
The Front End of Both Brent and WTIC Strips are Indeed

supported, in part, by the strongly sustained investment flows into the middle part of the strip. Thus, it pays to buy spot or front month, store, and sell forward to 2007-2009. Such is contango.

A proper discussion of the Crude Oil Futures strip probably should take place over a long weekend with scotch, and cigars. That said, people can call those investment flows into the middle part of the strip anything they choose--Peak Oil, Dollar hedging, Peak Light Sweet, pure speculation, or whatever.

But the strip "is what it is" and it's better that policy makers like the FED get respect for it, rather than trying to argue with it like so many people have done over the past 5 years.

Hard to count the number of dead bodies along the road, that have tried to argue with the oil price over these years.

Best,

LP
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