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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: 8bits who wrote (101149)	5/19/2008 1:38:03 PM
From: MIRU	Read Replies (1) \| Respond to of 206360

Contango - The term structure of the oil futures market is dramatically shifting from backwardation (inverted) to contango (carrying charge). A while back it was in contango and since that allowed people to buy cash oil and get paid for holding inventories it was assumed to be bullish, but that when oil futures went out of contango and inverted, oil would sell off big. Obviously the oil bull market ignored that development. Nevertheless, Coxe gives great importance to the current shift. He may think it means embedded inflation expectations, but what is really happening here and does it have any implications for the future price of oil?