OPEC Finally Catches a Break
- Price spreads increasingly signal demand outpacing supplies
- Brent in longest stretch of backwardation since April 2016
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The key sign of OPEC’s success may finally be here.
Since the Organization of Petroleum Exporting Countries embarked on its strategy to clear a global glut, analysts from Goldman Sachs Group Inc. to Bank of America Corp. have said that one critical indicator would show the plan is working: the discount on immediate crude would turn into a premium. That condition known as backwardation signals demand is outpacing supply.