13 comments on A gentle cough in the direction of the NYT
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Yeap, what this means is that maybe with 90% confidence I could say that price will go up. But with how much? And how do you know that it would be in these 90% not the 10% left?
Now look at the market. Maybe 80% of the futures deals are an insurance against future price volatility. If speculators (20%) manage to influece the price significantly (say futures go to 100$/barrel) the spot price will also grow to say 95$ (because it would become cheaper to buy now and store until maturity). But at 95$ there would be a disbalance because producers would not be able to clear stock and storing crude would cause huge loss, consequetivly both prices will drop. It turns out that the marginal barrel matters for the futures price, and only a major change in market expectations can change that.
In short I believe now is a good opportunity to become a speculator... anybody know how I can participate?