Peak oil review - Jan 19

..."Currently the oil markets are in a posture known as contango. While oil for February 2009 delivery is trading at $36 a barrel, oil for February 2010 delivery is trading for nearly $60 a barrel and for February 2013 over $70 a barrel. In this situation, the spread in prices far outweighs the monthly storage charges so that making money is a sure thing so long as one can find a place to store the oil. With little storage still available, the need to sell contracts to avoid taking delivery is forcing technical distortions into markets that tend to keep short term oil prices low."...
http://www.energybulletin.net/node/47780
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...I wonder if there is some sane economic perspective from which to ask why in the world would anyone arrange and operate a market for resources the way we do.



And their Quote of the Week, which speaks for itself:

* “I do not believe low commodity prices and rig counts will be here for long. Simply put, our industry rises and falls with the price of oil and gas, and two simple truths will provide upward pressure on prices for decades to come. Those truths: 1.) supply is finite, and 2.) the world population continues to grow at a tremendous rate.”

-- David Kent, President of Rigzone