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

oil crude spreads inventories runaway
Gulf
  • Date: 02-Jul-2021
  • Source: Yahoo News
  • Sector: Oil & Gas
  • Country: Gulf
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Runaway Oil Spreads Flash Warning for U.S. Crude Inventories

(Bloomberg) -- 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.

WTI for immediate delivery is more than $3 higher than delivery for four months ahead, the widest spread since 2018. The last time the spreads were this strong, inventories at the key U.S. hub were just slipping below 25 million barrels, about 15 million below their current level. The bullishness has steadily rippled along the forward curve, increasing market angst in recent days.

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