Long time leads...

by Hannes Kunz on Fri, Nov 18, 2011 - 02:45 (EDT).
definitely add to the volatility in price, as (perceived or real) shortages last for much longer than they would in a more flexible production environment. Equally, if new output hits a downturn - which is what largely happened with a lot of the new natural gas capacity in the United States in 2008/9, the new capacity which needs to keep producing despite not covering full cost - due to asset depreciation and time limits on leases - can add to the extension of periods at lower prices.

Add new comment

The content of this field is kept private and will not be shown publicly.
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.
Image CAPTCHA
Enter the characters shown in the image.