Normal
The narrower the spread between spot and the front month is, the more that it will appear as if OOO is "behaving somewhat", but that doesn't mean anything except that the spread is narrow. It doesn't mean that the spread can't widen, in either direction. It could go into deep backwardation and OOO might start outperforming what you see as POO.It's really not broken. OOO does not track the spot price of oil, no matter what you think. It holds the constituents of and tracks an oil futures index.
The narrower the spread between spot and the front month is, the more that it will appear as if OOO is "behaving somewhat", but that doesn't mean anything except that the spread is narrow. It doesn't mean that the spread can't widen, in either direction. It could go into deep backwardation and OOO might start outperforming what you see as POO.
It's really not broken. OOO does not track the spot price of oil, no matter what you think. It holds the constituents of and tracks an oil futures index.
Hello and welcome to Aussie Stock Forums!
To gain full access you must register. Registration is free and takes only a few seconds to complete.
Already a member? Log in here.
