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58 comments on I think Katrina and Rita got some folks attention

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viget on October 6, 2005 - 12:13pm Permalink | Subthread | Parent | Comments top
So then, the real number we should be concentrating on  is the spot price, no?
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pbrewer on October 6, 2005 - 2:44pm Permalink | Subthread | Parent | Comments top
I think the main reason that people track futures is that the market is very liquid compared to the spot market, so it shows up price changes very quickly.

And there is some information in the futures prices.  When they DO move out of line with what you'd expect based on interest rates, it means something significant is happening in the physical markets, such as a risk of physical shortages severe enough that contracts for delivery can't be met.

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