Crude Is Out Of Control
Forget "Peak Oil" we are talking "Weak Oil" now. The much-talked about price inverse known as contango is getting out of control, with Feb crude currently more than $6 lower than March. This is the steepest contango on record. There is currently around a $22 premium for Feb '10 crude over Feb '09. This is seriously abnormal.
US storage facilities are full to bursting, supertankers are being chartered to sit idle, loaded up with oil that nobody wants, waiting for a miracle to happen. Oil is effectively bidding for storage.
What happens when all the supertankers are full?
What happened last month when the Jan contract expired was that spot prices fell through the floor. Long-holders got squeezed out on the last day, unable to take delivery due to storage problems at Cushing, Oklahoma - the delivery point for West Texas Intermediate Crude.
As we all probably know by now, Wednesday is stocks day, with the US Energy Dept expected to show US crude stockpiles increasing by around 2.2 million barrels last week when the release their figures tomorrow.
Gasoline stockpiles are expected to show a 1.5 million barrel increase.
Why bother making biodiesel at these levels, in this sort of scenario? The flip side of that, for us here in Europe, will be a reduction in supply of by-products like rapemeal.
US storage facilities are full to bursting, supertankers are being chartered to sit idle, loaded up with oil that nobody wants, waiting for a miracle to happen. Oil is effectively bidding for storage.
What happens when all the supertankers are full?
What happened last month when the Jan contract expired was that spot prices fell through the floor. Long-holders got squeezed out on the last day, unable to take delivery due to storage problems at Cushing, Oklahoma - the delivery point for West Texas Intermediate Crude.
As we all probably know by now, Wednesday is stocks day, with the US Energy Dept expected to show US crude stockpiles increasing by around 2.2 million barrels last week when the release their figures tomorrow.
Gasoline stockpiles are expected to show a 1.5 million barrel increase.
Why bother making biodiesel at these levels, in this sort of scenario? The flip side of that, for us here in Europe, will be a reduction in supply of by-products like rapemeal.
