THE record differential between the front-month and more liquid second-month contracts at expiry last week once again raised pointed questions about whether the Nymex light sweet contract is serving as a good benchmark for the global oil market, or sending misleading signals about the state of supply and demand.
The expiring January 2009 contract ended down US$2.35 on Dec 19 at US$33.87, while the more liquid February contract actually rose 69 cents to settle at US$42.36 — an unprecedented contango from one month to the next of US$8.49.
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