Oil contango

If you want to do an arb trade involving physical commodities and are very cheap, have a look at carbon on ECX, you can trade the daily future, take delivery of 1 certificate for only a smidge over 15 thousand euros...
 
Right, spread widened again despite the fact that we're two weeks closer to close of 1st contract.

Conclusion - unknown but I'm starting the think that the futures are etremely prevalent on the spot. This seems to contrast with the textbook* theory that I had previously held in good stead.

*See MrGecko post
 
I think futures drive spot rather than the other way around. At the moment anyway. Or at least there's an equal balance. Just doesn't make sense that the spreads could move the way they are if the futures are driven by spot + premium when storage costs are quite constant and interest rates are so low. Or at least there is some sort of unknown risk being factored in. Either way it's gonna make it's way through to spot price eventually no?
 
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funding rates are all over the place at the moment and shipping/offshore storage costs are dropping
 
So the spreads should be tightening as we move towards last trading day.
Is there any way I can get rates data without bloomberg?
 
scose-no-doubt said:
So the spreads should be tightening as we move towards last trading day.
Is there any way I can get rates data without bloomberg?
Click to expand...

But what if someone gave you this data, how would you use it to make a profit. Chances are it would pose another question which needs to be answered and so on...

Good luck :)
 
@Anley - I'm not trying to be some sort of perfect trader here mate I just like to understand how markets work. I have never ever been profitable simply entering on TA alone with a stop and target. I personally cannot deal with the stress of leaving my money up to what is essentially a random outcome and therefore I want to understand as much as possible about the markets I want to trade so that I have a solid basis for why I am making trades. I'm not trying to profit from all this I'm just trying to understand what it is I'm dealing with. I realised that when I've placed trades for some reason other than TA alone I've dealt with the emontions a lot better. I dont get as hot as quickly and I don't sweat nearly as much :)
 
So, the spread can only be played by holding physical oil somewhere?
An article I read suggested you could go long the Sept contract, short the Oct but I can;t see how that would work in a £ per pip world where the movement is the same?

I tried plotting the Sept contract and overlayed the Oct contract and the spread never changes - it is constant.
 
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Should be showing a little bit of flux at least :confused:

What about getting the hourly closes for the same period, subtracting them and then plotting that.
 
The crude spread between two consecutive months does change but not by a lot. See attached.
 

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    WTI Spread.gif
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