How much will a barrel of crude oil cost a year from now? If you believe in the predictive powers of the futures market, US light sweet crude will be just under $101 a barrel in March 2009. Then again, at the start of the year, the same contract commanded $89. A year ago, it was $69.

Some see the oil forward curve, aggregating the views of traders as far out as 2016, as the best predictive tool available, being a “market” measure. That is only partly credible. Trading volume has increased dramatically, but liquidity drops sharply for contracts tied to dates beyond one year out. Near-term futures often trade at a premium to those further forward to reflect the convenience of having access to physical oil supplies.