U.S. Oil Curve Flattens as Crude Release Blunts Supply Risk
- WTI futures premium for nearby months to later months shrinks
- U.S. to release 1 million barrels a day of oil for six months
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The U.S. oil futures curve is already starting to weaken on the expected wave of oil supplies from the U.S. Strategic Petroleum Reserve.
West Texas Intermediate crude futures for immediate delivery were trading more than $5 a barrel above the next-month price a few weeks ago - a level that indicates traders are willing to pay a huge premium to secure prompt supply. That gap dropped to as little as $1.63 after Bloomberg reported that the Biden Administration may release as much as 180 million barrels of oil from the strategic reserve.