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Barry Parker Commentaries

End of the commodities super-cycle

Feb 9, 2015
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The past few weeks present a startling example of why forecasting commodity prices is a tricky business…and putting such prognostications in writing is downright perilous. As the ink was just drying on my recent suggestions that floating storage would bolster the tanker markets for awhile, as I channeled various tanker and energy analysts, the oil markets undertook a big upward correction. Yes, I had hedged myself by reminding readers that the front end (spot and nearby) portion of the forward curve in oil is likely to be far more volatile than it was in 2009 (the last storage-induced tanker boom). But, bottom line, the economics briefly evaporated for contango trades loosely described as “buy now /sell forward, and hold on a tanker in between”.

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