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Al Naimi bullshitting again.

In my view the Saudis are pumping as much pre-paid oil as they have contracts for. Maintaining market share is a beneficial and unplanned side effect.

The outcome is that the Saudis are now settling 'oil loans' by delivering - at a time when the price is mid $40s/bbl - oil for which they were prepaid anything up to $120.

So what we see is that what were off-exchange physical long positions are now coming onto exchanges as long futures contracts. This probably accounts for spikes in the price as traders extract their toll.

If muppet investors persist in holding their position, then the increasing contango will see them pay dearly enough on monthly roll-overs for that privilege for traders to rent tankers and store oil.

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Sat Jan 10th, 2015 at 09:59:04 PM EST
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