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To: thackney
that is the definition of a futures market, speculating what the future supply and demand will be.

The futures market 'predicts' annual price increases from today's front month, January, at $57.49, of 7%, 6%, 3%, 2% and 1%. In other words, it is in slight contango, but not appreciably more than carrying cost. Two years from now, it is at $65 and 10,800 full-size contracts are being bet on that. For perspective, one of those contracts represents more risk than most of us would be able to assume.

So the market is telling the industry that we're in this for the long haul.

16 posted on 12/13/2014 8:20:05 AM PST by Praxeologue
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To: Kennard

One contract is 1,000 barrels, so 10,800 contracts is 10,800,000 barrels, with a current market value of $621 million.


17 posted on 12/13/2014 8:24:48 AM PST by Praxeologue
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