Been following this for a long while, but now the spread between the front month contract for light sweet on NYMEX (CL Jan 09, $40.81/b) and the last month contract (CL Dec 16, $81.83/b) is 103% of the front month price.
The one year differential, between front month and CL Jan 10 ($55.51/b), is now $14.70/b or 36% of the front month price.
Thus I will hereby refer to this phenomenon as "the Giant Contango of 2008."
Are we out of storage space? The EIA data from Wednesday suggests otherwise, which could mean it's all about demand. Good ole supply and demand. For liquidity, that is.