The end of the article points to the issue, matching supply to demand in future months. Namely, why it is unlikely that Oil will fall enough to get $1.25 per gallon gas. But for traders why it is unlikely that Oil will fall to $20 bbl.
We already know that there is more inventory rise for oil, but we also know that both gas and diesel inventories have fallen. Which explains why Oil prices are maintaining but gas prices are on the rise from the January time frame.
Also, Oil price futures are still pointed upwards. If there was enough concern what is called "tank tops" we would already see speculation take Oil futures downwards.
As of writing this response by contract month, for the next 6 months, in today's speculation...
April: $50.37
May: $52.37
June: $54.00
July: $55.45
August: $56.71
September: $57.83
For any month in the next six months I see almost no strike offerings for Oil in the $20 bbl - $30 bbl. Most of the active volume being traded as of today for the next six month's worth of contracts is still between $40 bbl to as high as $70 bbl. Granted, some of this is pressure by source but overall there is very little trading suggesting another collapse in Oil given what we know thus far.
I am stuck with a previously offered conclusion when $20 bbl came up a few weeks ago. Until another major economic movement causes it, what we have thus far does not suggest another round of Oil price drops. Oil prices would shy towards $45 bbl to $50 bbl if conditions stay as is, but we know that is not the case given demand for diesel and gas is already on the rise to some degree.
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BTW, the price for April 2015 contracts just shot up to $50.42 and is still up from the previous day's close of $49.59. Again, if this article was entirely accurate we would already see trading for future months turn negative on stock Oil supplies. But every single month going out 6 months is up today, in fact so is the entire next year. (I checked once again before hitting reply.)
