dinsdag 13 januari 2015

Oil Contango Vs. Oil Price

The copper contango theory is also applicable to oil. This means that contango (green chart) points to a bottom in the price and a top in oil stock level.

First chart: oil contango 6 month spread: you see that oil was historically at contango at 3.
Second chart: oil price: you see that we had a peak in 2008, when oil went into backwardation. And oil plunged end 2008 when oil went back to contango.

Today (13-jan-2015) we have a contango (see chart below): The six month contango = 52.77 - 48.36 = 4.41. This is a pretty steep contango when you compare it historically.
That means we are very close to a bottom in oil. I'm watching oil very carefully and see when there is an opportunity to buy the dip.

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