Oops... Crude oil really is trading well below $40, at least for today

I made the mistake of trusting the NYMEX termination schedule for crude oil which said that the last trading day for the January contract was December 18, 2008. But, that date is not in line with the contract specification, which says:

Last Trading Day

Trading terminates at the close of business on the third business day prior to the 25th calendar day of the month preceding the delivery month. If the 25th calendar day of the month is a non-business day, trading shall cease on the third business day prior to the business day preceding the 25th calendar day.

Since December 25 (next Thursday) is clearly a holiday, the preceding business day is December 24 (Wednesday) and three business days before that is Friday, today.

I apologize for trusting NYMEX so blindly and not checking! Usually, they are quite reliable.

Nonetheless, although crude oil futures are currently trading at $35.74, that is for the January futures contract which ceases trading today. Monday, trading switches to the February futures as the front month, which is currently trading at $42.64. Basically, speculators who do not want to actually own the physical oil  are dumping the January contract and rolling forward into the February contract. So, even though oil is well below $40 today, that will not necessarily be the case Monday morning.

The February 2009 crude oil futures contract peaked at $148.17 on July 11, 2008. It has declined 71.90% from that peak price.

-- Jack Krupansky