The supply cuts agreed to by the Organization of Petroleum Exporting Countries and its allies pulled down U.S. crude and refined product inventories by 136 million barrels from their February peak, boosting spot prices by almost $6 a barrel. At the same time, U.S. shale producers locked in profits by selling contracts for a year or two out. The forward curve, which shows the value for oil at various points in the future, flipped from contango, where prompt contracts are at a discount to later delivery, into backwardation, where immediate delivery is at a premium.
Source: Bloomberg Pro Terminal
Trader Bozhidar Arabadzhiev
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