Tuesday, March 29, 2016

Trying to understand how oil producers use contango... please enlighten me

So I think I understand it... but I just want to make sure. Let's say oil futures are selling for $5 more than current spot price one year out... do producers sell these futures now to book profits against their current production to book profits/sales? And if Crude then drops in price they benefit, and if it rises higher than that 5$ level they miss out on opportunity?



Submitted March 29, 2016 at 09:52AM by Super_Blessed http://ift.tt/1qe1oRa

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