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golden-face 33 minutes ago [-]
Something definitely seems rotten in The Kingdom of Denmark with respect to the price of oil but I guess the market knows best. What that knowledge is, I don't know.
If anything it's surprising the price of natural gas hasn't gone higher considering ~20% of the supply is going to be inconsistent for 2+ years.
d4ng 5 hours ago [-]
Everyone’s talking about an oil price spike if stocks are depleted, but the heavy backwardation of crude oil futures tells a completely different story. Who is right? Are crude oil traders, who I’m sure know exactly how much remains in reserve, on Chinese fentanyl, or is something else going on?
There was a press release by Exxon a couple of days ago with claims of prices hitting 150.
People have been making similar claims for months, but it hasn’t happened. The forward curve has been backwardated for quite a while now.
Is it Exxon doing a please buy our oil while it’s high, or is something else going on? Pray tell.
AdieuToLogic 53 minutes ago [-]
> Everyone’s talking about an oil price spike if stocks are depleted ...
Oil prices are determined by expected future cost and are only influenced by national reserves in the short-term.
> ... but the heavy backwardation of crude oil futures tells a completely different story.
This assertion is belied by Brent oil prices since the beginning of 2026[0].
> There was a press release by Exxon a couple of days ago with claims of prices hitting 150.
Again, referring to the cited Brent oil trading price[0], it has already hit 118 twice this year.
> People have been making similar claims for months, but it hasn’t happened. The forward curve has been backwardated for quite a while now.
This is demonstrably incorrect, as previously identified.
- This is a situation they’ve never faced before. It’s hard to simulate and betting on high prices may not be a great bet. Especially given that oil futures aren’t like buying options. You actually have to take delivery.
- They’re expecting a recession.
- They don’t want to invest the money In aggregate that they’d have to in futures to raise the price above certain levels.
- They suspect a lot of oil consumers will simply shut shop and end demand since those prices won’t be sustainable for many businesses. Airlines are already canceling flights.
- They expect the blockades to end sooner rather than later.
vannevar 2 hours ago [-]
There is another possibility: "they" are interested parties working to keep futures down as long as possible. When the space shuttle Columbia re-entered with a massive hole in its wing, the control systems kept it stable for quite awhile, until finally the vehicle went so far out of the control band that it could no longer compensate and it disintegrated. We may be seeing the same thing happen on a much larger system that is experiencing conditions outside of its operating history.
d4ng 4 hours ago [-]
Options on crude oil futures settle in the underlying (futures), which settle in the underlying (oil) at expiry of the futures contract. Futures positions can be closed without giving or taking delivery.
You give some interesting ideas to think about, however if we predict everyone shuts up shop in the future, then I don’t see near price of oil going to 150.
dzonga 2 hours ago [-]
I would listen to commodity traders before politicians or anyone.
Strategic stocks will get depleted - demand will remain high whether the strait opens up or not due to so much pent up demand.
2 hours ago [-]
4 hours ago [-]
achierius 5 hours ago [-]
It's possible that oil traders are still trading on the assumption that the war will be over Soon™, in which case the expectation is that we won't hit the bottom of our stockpiles and thus there'd be no reason to price in that eventuality. I don't know if I agree with that, and I would certainly be surprised if traders generally thought as much -- but who knows!
credit_guy 3 hours ago [-]
No. If you read 2-3 articles about the war in Iran per day, be sure they read 20 or 30, and they probably use LLMs to summarize 3000. For us, it's only the feel-good of being smart. For them it's money.
If anything it's surprising the price of natural gas hasn't gone higher considering ~20% of the supply is going to be inconsistent for 2+ years.
There was a press release by Exxon a couple of days ago with claims of prices hitting 150.
People have been making similar claims for months, but it hasn’t happened. The forward curve has been backwardated for quite a while now.
Is it Exxon doing a please buy our oil while it’s high, or is something else going on? Pray tell.
Oil prices are determined by expected future cost and are only influenced by national reserves in the short-term.
> ... but the heavy backwardation of crude oil futures tells a completely different story.
This assertion is belied by Brent oil prices since the beginning of 2026[0].
> There was a press release by Exxon a couple of days ago with claims of prices hitting 150.
Again, referring to the cited Brent oil trading price[0], it has already hit 118 twice this year.
> People have been making similar claims for months, but it hasn’t happened. The forward curve has been backwardated for quite a while now.
This is demonstrably incorrect, as previously identified.
0 - https://markets.businessinsider.com/commodities/oil-price?op...
- This is a situation they’ve never faced before. It’s hard to simulate and betting on high prices may not be a great bet. Especially given that oil futures aren’t like buying options. You actually have to take delivery.
- They’re expecting a recession.
- They don’t want to invest the money In aggregate that they’d have to in futures to raise the price above certain levels.
- They suspect a lot of oil consumers will simply shut shop and end demand since those prices won’t be sustainable for many businesses. Airlines are already canceling flights.
- They expect the blockades to end sooner rather than later.
You give some interesting ideas to think about, however if we predict everyone shuts up shop in the future, then I don’t see near price of oil going to 150.
Strategic stocks will get depleted - demand will remain high whether the strait opens up or not due to so much pent up demand.