In jargon inventories provide a “convenience yield”, which in the oil market can be quite sizeable. The convenience yield is normally inversely related to the deviation of inventories from their desired size. 8  BIS Review 105/2008  price of oil [Figure 4].
18 More recently, since 2005, this relationship between the risk premium and the spot price of oil appears to have changed and risk premia paid by hedgers have been shrinking to become even negative between early 2005 and 2007.