Quote:
Originally Posted by Mathgod
From the column:
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There are two sides to the bet though. There are equal numbers of people betting on lower oil than higher oil. Essentially saying it’s a one way process implies there is no one taking the low.
In the assumption of the article that these aren’t future sales of real barrels in which companies hedge to avoid downside risk there are equal pushes for the price to be exceeded best the price to tank.
There is no price undercutting by the market because barrels are being bought at the market price. Oil companies are price takers.