Publications: Notes at the Margin

Inventories and Uncertainty (October 2, 2017)


Prompt oil prices rose sharply last week. Brent moved into backwardation. Speakers at the Asia Pacific Petroleum Conference (APPEC) in Singapore were quick to project an impending shortage. A speaker from Citi apparently even predicted a significant squeeze in 2018. One can understand the excitement. Markets have moved rapidly from contango to backwardation. It appears that threats from Turkish president Recep Erdogan to block Kurdistan’s crude oil exports if the province held a referendum on independence from Iraq were a principal factor behind the price movement.


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