Oil Futures Curve Has Little Predictive Value

Peak Bull Crap

The oil market is the hot market right now from a news generation standpoint. But there are a lot of people writing and even trading in the oil market that frankly don`t have any clue what they are talking about. I have read some real rubbish the last few months regarding the oil market, and with the recent fall in prices, the last few days have been characterized by peak bull crap. Maybe if anything else this is an indication of the bottoming process in oil. Sort of like all those do it yourself Gold Mining shows hitting the reality television scene pretty much nailing the near term top in the gold market.

Long History of Studying Oil Markets

Remember we have been doing this a long time, just read some of our older stuff where we break down the huge drop in U.S. Imports of oil from a finance and numbers analysis with our conclusion that the oil market was long overdue for a major pullback just based upon the US Domestic Oil production pushing down External Imports of oil to such a degree that that there was no way a slowing China could possibly eat up this difference because the numbers were so huge. That the oil had to go somewhere, and frankly we were surprised that it took the rest of the market so long to get it.

Financial Hacks

There are a lot of stupid people in the world, and the financial markets industry is filled with an abundance of hacks even at the professional level. But you now have people who have never followed the oil markets all the sudden giving their hack analysis of the commodity. And it is time to call bullshit on this stuff!

Oil Futures Curve

The oil futures curve used to be more relevant with Contango and Backwardation analysis and to some extent it becomes self-fulfilling and pretty useless as an indicator of market strength or weakness that is already known in the market. Thus anybody today who routinely starts referring to these two terms for their price predictions for the oil market, is only getting the derivative cause for the price movements in the market. Someone who knows what they are talking about will just stick to the primary cause.