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Gold/Mining/Energy : Oil & Gas Price Economics -- Ignore unavailable to you. Want to Upgrade?

To: Arktic who wrote (90)	4/22/1999 5:23:00 PM
From: Rod Copeland	Read Replies (1) \| Respond to of 350

Paul, I noted the same a few days ago. All I could attribute it to would be the "war premium". Also read Yamani's comments today... which were not bullish for oil. It has gone up awfully fast and far. Some correction might be appropriate. Rod.

To: Arktic who wrote (90)	4/22/1999 8:59:00 PM
From: Razorbak	Read Replies (1) \| Respond to of 350

Backwardation Paul: This is a market condition referred to as "backwardation", which is similar to an "inverted yield curve" for oil futures contracts. "Contango" is the opposite, or more normal, situation. A backwardation curve is generally interpreted by fundamentalists and traders alike as evidence that commodity prices are expected to fall from current levels over the term of the futures strip. mypage.channeli.net 193.135.166.4 193.135.166.4 Hope this helps. Razor

To: Arktic who wrote (90)	4/24/1999 10:21:00 PM
From: ferrit	Read Replies (2) \| Respond to of 350

Paul: As you observe Crude Oil futures are in very marked Backwardation. This normally occurs only when there is an acute shortage of the commodity for spot delivery, eg when Russia is holding up supplies of palladium. Since there is no shortage of crude oil at present,nearly all storage tanks are full, the only explanation I can offer is that the market expects OPEC to abide by the quotas for a few months, but by next summer they will again be over producing thus driving the price down. I would be very interested in the views of people with knowledge of the futures markets, because I too am puzzled.