Phil Flynn Talks High Oil Prices with ONN.tv

Phil Flynn, Fox Business News Network contributor, dissects the
oil market with StreetSmarts
CHICAGO--(Business Wire)--
StreetSmarts, a weekly interview program hosted by www.onn.tv,
interviewed Phil Flynn from Alaron Trading, a regular contributor to
the Fox Business News Network. Kevin Cook sat down with Flynn to find
what's going on behind the headlines of $129 barrel oil, and whether
those high prices are here to stay. As oil continues its meteoric
rise, the markets debate the reality of "peak" oil. Many analysts
believe that the market has reached a point of peak oil, where the
world is reaching the end of natural oil supplies--which means oil
prices will only go higher because demand will persist in outstripping
supply. But others have pointed to the market itself and noted that if
the long-term fundamentals were predicting continued higher prices,
then the back month oil future contracts would reflect this.

Flynn suggests that a shift is starting to occur that may win the
argument for the peak camp. Today, as oil hits a new record high, the
back month contracts for delivery up to eight years out are all
trading higher. Some analysts and traders think that the market is
finally recognizing the real possibility of supply disruptions, and
that oil traders may be taking a longer-term view on the situation.
Instead of discounting the near-term demand spikes by selling the
further out contracts, the market is actually acting like it may "pay
to put oil away." In other words, if oil industry participants believe
that prices will maintain at these levels, then they will gladly store
it in hopes that they can charge even more down the road.

According to Flynn, oil traders capitalize on this by trading
spreads. In the last few months traders were willing to buy the front
month contracts and sell the back months. Now, they are more likely to
sell the front and buy the farther dated contracts. See the complete
11-minute interview only at www.ONN.tv.

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Ed McDaries, 312-362-2548
info@onn.tv
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