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Strategies & Market Trends : The Financial Collapse of 2001 Unwinding
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To: richardred who wrote (135)3/16/2017 3:23:46 PM
From: John Pitera1 Recommendation

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richardred

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Saudi is a low cost producer.. Venezuela is even a lower cost producer I believe. Transportation costs do fit into the picture. As the USA has become a net energy exporter over the past decade obviously the cost of getting product to Cushing, Oklahoma... (the central clearing hub for NYMEX contracts that are physically delivered) as well as elsewhere in the US is lower than bringing it in from the mid east.

For many years I assumed that Brent would always be a a discount to WTIC.

Back in the 1980's and 1990's when we would roll into the June stock futures contracts they would trade at a noticeable discount to the cash index. That was because you could control a portfolio of stock for 5% and then take the other 95% or so and invest in a yield bearing account....the discount would diminish as we would get closer to contract expiration, at which point the 2 prices would converge.

John
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