No Future for Oil

I just researched a bit about oil future contracts.

The Japanese exchange Tocom lists them on this page, and they only reach until April next year right now, so oil has no future over the next couple of months as far as Tocom is concerned, a fact that is confirmed by looking at this page.

In contrast, the American “Light Sweet Crude Oil WTI Futures” market extends about 10 years into the future, until December of 2021. However, there seems to be very little market activity on all contracts more than a couple of years into the future. Right now, everything after January 2015 shows a volume of “0” for the trading day. In contrast, the volume for the most heavily traded January 2013 is 12,105, and volume drops drastically to less than 2,400 for all other months after that, and another order of magnitude to less than 240 for everything later than June next year.

So either oil has no future, or these markets don’t particularly care about it.

From my very brief research on this it looks like one would have a hard time to even find an oil future contract for a delivery 20 years later.

In contrast, with solar and wind, you can lock in your price right now and know exactly what you will pay for your solar energy in 2032 (e.g. nothing, since until then the installation costs will be repaid).

Clearly, as soon as one looks a couple of decades ahead, solar is the cheapest and most reliable option around.

 

Published by kflenz

Professor at Aoyama Gakuin University, Tokyo. Author of Lenz Blog (since 2003, lenzblog.com).

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