RE:RE:RE:Market will love it A lot of commodities are in backwardation right now because there is, or there is a perception that there is a shortage of supply for immediate delivery. Like copper. Many foodstuffs. But not all. Gold, for example, is in the more typical contango curve whereby futures are higher than spot because mr market is expecting gold prices to go up in the future and/or the futures price reflects the time value of money and storage costs. https://www.denvergold.org/precious-metal-prices-charts/gold-futures-curve/
My point is, nobody can sell oil , a year from now , at $85 or $80 or $75 by "locking it in" using puts or futures. Same thing as one year ago. A year ago, wti was under $40. That's your yardstick for Q3 sales when they come out.
Rational43 wrote: Backwardation is always bullish for prices.
Backwardation signals that the market is short, right now. It shows that there is not a comfortable supply right now.
For most of any commodity bull market the market will be in backwardation, and dimwitted CFO's of commodity producers will continue to lose money to hedging year after year after year.
The sellers today are the ones who are disgusted by the lowball hedges ATH put in place.
They will be more than replaced by the serious money that was staying away from ATH over debt concerns, and love the cautious approach.
I did not like the press release at all....but the market will over time. You will see funds start to accumulate a position in ATH.