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Runaway Oil Spreads Flash Warning for U.S. Crude Inventories

  • Nearest three WTI spreads touched $1 backwardation Thursday
  • Last time spreads were so strong Cushing inventories plunged
Updated on

The U.S. oil futures curve is pointing to a tightness the market hasn’t seen in years, sparking concerns of the potential for sharp inventory drawdowns.

The three nearest so-called timespreads on the West Texas Intermediate futures curve hit $1 a barrel or more on Thursday. That’s an indicator that the market is growing increasingly worried about supply tightness, particularly at the key storage hub of Cushing, Oklahoma, where U.S. crude futures are priced.