For example if confirmed information spread today that for some reason oil producers will increase their supply one month later, will this affect oil spot prices immediately like what happens in stock market? or price remains at the same average and just days before the actual rise in supply occurs, some companies may defer oil purchase until supply is actually increased leading to prices drop days before the actual rise in supply and then price declines more when actual rise in supply occurs?

2 Answers 2


Yes commodities markets are affected by speculative information just like stock markets - everyone guesses at future earnings for companies, and the stock prices reflect that guess. They do not wait for the actual earnings to be reported.

But, in commodities markets futures prices are more affected by speculative information than spot prices, since spot prices are more determined by current supply and demand (other then speculators that buy a commodity and store it to try and arbitrage off of futures prices, for example)

Also, just like the stock market, actual information is generally more powerful that speculated information, since different speculators can guess different ways, sometimes muting the price effect.

  • In addition, oil is easily stored, so market participants can make quick decisions to store or to take oil out of storage. These decisions would affect the spot price. Commented May 22, 2021 at 19:57
  • this means that oil prices are more predictable than stocks using new market information that can be exploited by speculators to make gains Commented May 23, 2021 at 10:28

It will have much more of an effect of futures prices. The scenario you lay out is called backwardation, the inverse of contango, on the futures curve.

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