Question
The oil market is very sensitive to seasonal changes as well as other world events, which inadvertently results in oil futures contango markets. Recently, the
The oil market is very sensitive to seasonal changes as well as other world events, which inadvertently results in oil futures contango markets. Recently, the Covid-19 pandemic has created significant pressures on the oil market.
In order to receive full credit, I am asking you to consider several aspects in your answer:
1) What exactly is the oil futures contango market?
2) What is the relation between the oil market and Covid-19 pandemic? and why does that correlate to the oil futures market?
3) Assume that you would have the capacity to store oil (empty warehouses, tankers, your grandma's basement etc), what restricts you from storing the oil right now? Why does that matter with regards to the contango market?
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