Brent Crude Trades in Backwardation on European Demand

Brent crude futures traded in backwardation on the London-based ICE Futures Europe exchange.

Front-month contracts moved into backwardation, a market situation where cargoes for earlier delivery cost more than later shipments, for the first time since Oct. 14.

“Brent moved fractionally into backwardation this morning on strong European demand and attractive margins,” JPMorgan Chase & Co. said in a note today.

The January delivery contract traded at $89.60 a barrel and February was 4 cents cheaper as of 3:08 p.m. local time, according to ICE data.

The Brent futures market was last in prolonged backwardation in the first half of 2008.

To contact the reporter on this story: Raj Rajendran in Singapore at rrajendran4@bloomberg.net

To contact the editor responsible for this story: Rob Verdonck at rverdonck@bloomberg.net

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