Matt Simmons on Oil Supply/Price on CNBC Fast Money last night

I am bull on Oil long term and have been accumulating positions in both Oil and Gasoline on the NYMEX. Prices have plummeted from $145 last year to $34 a barrel at one point yesterday. West Texas Intermediate(WTI) is approximately $10 less than Brent Crude – a very unusual price relationship, reflecting the huge record WTI inventories currently in Cushing, OK. Oil is currently in contango which is typically a bearish scenario.

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One Response to “Matt Simmons on Oil Supply/Price on CNBC Fast Money last night”

  1. Mike Knapp Says:

    Greetings,

    Appaently the “hoarding” of WTI in O.K. and in offshore tankers, etc. is indicative of a general belief that we are in for higher WTI crude prices. The price NYMEX futures substantiate this statement. However, we seem to be experiencing “Giant Contango” if you will, and this may have future short term ramifications due to the “hoarders” eventually dumping their reserves as the price of WTI rises. This dumping should have a negative effect on supply and adversely effect the tradable vehicles like USO, etc. I believe this negative pricing effect will be short lived and therefore, I am bullish on oil in the long term, especially if OPEC agrees to more cuts on production…or should I say the members of OPEC actually “cutting” their production as promised. In the meanwhile, the shorts are having a “field day” on USO!

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