Quote Originally Posted by Not_A_Llama View Post
How do you interpret contango in the forward months? Pure cost of carry spread, or fundamental mispricing/opportunity in the cash/prompt?

Looks like you're playing ETFs - the trade is pretty easy for me to see on ICE, but have you thought about playing the spread on USO/BNO?

With WTI inventories where they are, plus geopolitical risk out east...
(limited knowledge in comm/energy/ser3)
For Aug'15? I think lower? I don't know how there will be change in demand after last holiday travel season on sept. I don't see any transport/retail picking up either. (if you see, majority of large retailers didn't do good last Q).

At this moment due to faster decrease in price of USO relative to decrease in price in BNO, I am looking at USO. Maybe investors are speculating the price of oil futures at specific dates lower than current spot. I don't see diesel demand shooting really high either by looking at cross elastcity withdiesel, octane and natgas. Natgas futures being so cheap, I don't know how Nov oil futures will play out. My guess is not as good.

I think Shanghai and Hanseng falling 3 consecutive days (except today, indicies are up) and China's possible slowdown (demand side) can be more significant the Greece+Iran. That being said, I think WTI invetory glut (which we are fully aware of) is less uncertainty than how China economy will play out. With that being said, I am more focus into USO than BNO.