Futures Indicate That the Syrian Oil Spike Won’t Last
By Alex Rosenberg
Syria concerns have driven crude oil to a two-year high. But the futures market is telling traders that a correction could come soon.
As the U.S. appeared to draw closer to a military strike against Syria, oil closed Wednesday at its highest level since May 2010. But while crude oil for October delivery closed at $109.52, crude for December delivery settled at $107.32, and crude for June 2014 delivery closed at $99.47, gaining just 2 cents on the day.
So what’s going on here?
Well, it’s important to understand that there’s a great deal of complexity to the market
“We cannot say, ‘Aha! The market is going to trade at this given level,’” said Stephen Schork of the Schork Report. In fact, this situation indicates that “the market is pricing in some sort of value for owning barrels in the spot market,” and for that reason is a testament to the strength of the oil market.
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