The Bastion of Oil-Market Bullishness Is Starting to Crack
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For much of May, nearly each and every time that oil prices tanked amid concerns about the deepening U.S.-China trade war, one corner of the market held up: timespreads.
The spreads -- the price difference between contracts for immediate delivery and forward ones -- reflected tightness in the physical market, with refineries willing to pay large premiums to secure barrels straight away. As such, the oil curve was in a steep backwardation, where spot crude trades above later contracts.