Tuesday, May 06, 2008

Barak Obama and Convenience Yield

Could a drop in June crude futures prices over the past two days* be due to this? Uncertainty about Nigerian oil deliveries has injected a lot of risk (and thus cost) into the crude futures market, so anything that is seen to lessen uncertainty should have the opposite effect.

*That is, the drop that happened just before yesterday's sharp increase--for which I have no explanation!

Update: The more I think about this, the less I think this announcement had any effect on convenience yield. The brief drop in futures prices just prior to the most recent jump looks more like noise than a reaction.

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