Tags: oil | futures | rising

Oil Futures Touching $100 a Barrel

By    |   Tuesday, 10 Nov 2009 09:08 AM

The recent rise in spot crude oil prices to a one-year high above $80 a barrel has led some experts to call for further gains.

Telling, futures for crude prices already flirt with $100. The December 2017 futures contracts, the longest-dated ones traded on international exchanges, have just about reached that level for Brent and West Texas Intermediate crude.

Those futures prices have hit one-year highs too.

“The entire crude forward curve has moved up,” Michael Wittner, oil strategist at Societe Generale, told the Financial Times.

“We assume that investor flows have pushed up long-dated prices.”

Oil’s gains are part and parcel of the recent rise in riskier assets, experts say.

Hussein Allidina, head of commodities research at Morgan Stanley, told the FT, “The deluge of global liquidity has contributed to lifting oil prices — along with other risky assets — since February.”

To be sure, it’s not clear the futures prices mean a whole lot.

As trading volume for long-dated contracts is slim, a few big purchases can push prices way up, Adam Sieminski, chief energy economist at Deutsche Bank, explained to the FT.

“Futures markets have been shown by many academic studies to not predict the future,” he said.

Whatever the relevance of futures prices, many experts see crude heading still higher.

Oil legend T. Boone Pickens said in a recent speech that oil prices will reach $300 a barrel in the next decade if global demand isn’t trimmed.

Nevertheless, the International Energy Agency now forecasts a 40 percent increase in global energy needs by 2030.

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The recent rise in spot crude oil prices to a one-year high above $80 a barrel has led some experts to call for further gains.Telling, futures for crude prices already flirt with $100. The December 2017 futures contracts, the longest-dated ones traded on international...
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2009-08-10
Tuesday, 10 Nov 2009 09:08 AM
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