The Fundamental Tethering of Oil Prices to Fundamental Value

In times of oversupply, the market needs to widen its cantango in order to facilitate and finance pay for increasingly scarce inventory space. That's when you get these like super tanker trades, where a commodity trader or a major oil company will literally lease super tankers and store one or two million barrels of crude on them. The financial markets allow a huge amount of information to be transmitted into price discovery much faster than the physical realities manifest themselves. But I think that both sides of this can kind of tug and pull at different ways in different moments in time.

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