Oil Curve Rally Shows No Let Up, Lifted by Vaccine, Demand
- Some critical WTI, Brent futures indicators flip positive
- Vaccination plans, increasing hedging help to flatten curve
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Forward oil prices once again strengthened in ways that indicate both tighter physical availability of crude, but also a brighter outlook for consumption once vaccines against Covid-19 start to take effect.
The nearest December Brent futures are now trading at a higher level than the same contracts for December 2022, surging to the highest premium since February on Thursday. The structure, known as backwardation, signals expectations for a tighter supply-demand balance next year. That can be seen in the marked flattening of the oil futures curve over recent weeks.