The contango between the front-month April contract and the second-month May contract has been severely smashed over the last day.
Having averaged a difference of about $2 per barrel over the last couple of weeks, the two contracts are now trading at an interval of around $1 — April at some $47.54 per barrel and May at $48.52 per barrel.
The big question now is does this mark the sign of a renewed rally or is it simply a good opportunity to short oil?>>>MORE
Tuesday, March 10, 2009
Oil: Contango smashing
From FT Alpaville: