Unsolved Contango Mysteries
By Phil Flynn
Who knew? What did they know? And when did they know it? No, I am not talking about the Soviet style show trial in Washington with oil company executives. What I am talking about is who knew about the upcoming adjustments to the International Energy Agency's long-term supply forecast. It's obvious based on the markets quick dramatic move from backwardation to contango over the last few weeks that someone had a very good idea that the IEA was about to make a major announcement. This week I have been asking why the market in just a few short weeks had this sudden epiphany that the world was running out of oil. I have been asking why oil in the deferred contracts had an almost unprecedented gain of almost $8 a barrel on the front month contracts in just a few weeks. Now I think we all know why. Obviously some one knew something.