This is a very encouraging report for oil bulls. I think once you get the big earnings revisions coming this quarter, the group could be selectively bought. The market might be discounting this event already but its impossible to know for sure. Many major oil companies may not make any money at all for some time, explaining how a basked of 10 investment grade oil and gas companies credit default swaps tripled in the last 3 months.
By Jane Xie SINGAPORE, Jan 9 (Reuters) – For the first time since 2009, a contract to buy crude oil or any sort of refined product costs less if its for immediate delivery than for future shipment, giving traders more reason to buy now than later.This phenomenon motivates traders to purchase oil now, store it in tanks and sell it for a profit when prompt demand recovers. But whether the contango – or when spot prices are at a discount to future prices – would help lift the market remains to be seen. Benchmark Brent crude <0#LCO:> prices have fallen over 50 percent since August.
via Entire oil complex slips into contango for first time since 2009.