[extropy-chat] Re: peak oil debate framed from a game theory standpoint ?

[Lifespan Pharma Inc.]

Brian Atkins wrote:

> Ok let me simplify and just ask you and/or Hal this:
>
> If we are to accept that longer term crude futures contracts have any 
> worthwhile prediction capabilities, how do we explain the fact that 
> the current October 2005 contract (CLV5):
>
> <http://charts3.barchart.com/chart.asp?vol=Y&jav=adv&grid=Y&org=stk&sym=CLV5&data=E&code=BSTK&evnt=adv> 
>
>
> essentially just has mirrored over its lifetime the spot cash price:
>
> <http://charts3.barchart.com/chart.asp?vol=Y&jav=adv&grid=Y&org=stk&sym=CLY0&data=E&code=BSTK&evnt=adv> 
>
>
> If it truly had some predictive power shouldn't it already have jumped 
> up closer to $60 when it started off? As recently as May of this year 
> it was below $50, and back as late as June 2004 it was below $40. If 
> the market is so intelligent, or moved by the opinionated, why didn't 
> it forsee yet more worldwide demand, continuing strained supply etc.? 
> And is Hal's analysis that we should look to the 2008-2011 future 
> prices as proof of no upcoming oil price spike really worth considering?
>
> All I see from those two charts is a market dominated by shorter term 
> analysis, perhaps as short as 3 months or less, with no significant 
> deviation of the longer term contracts from the immediate consensus at 
> any given time.

Isn't that because the profit is taken by those willing to buy 90day 
options and bet on increases during that period.
Risk and profit are in 90 day cycles.
You have to keep investing in options and hedge them against spot prices 
to make or loose money.
The market doesn't care what happens beyond  that, right?