Crude more Backwardated on signs of China Easing

Crude spreads push higher as backwardation strengthens on potential higher demand from China, as restrictions start to ease and as the EU negotiations continue.

• The Brent Jul-Aug spread is especially strong approaching the Jul22 contract expiry tomorrow. The spread has rallied from 1.15$/bbl to a high of 3.92$/bbl since 10^th Mar and WTI has only rallied from 1.49 to 2.89$/bbl in the same time period.
• The longer-term spreads such as the Dec22-Dec23 spreads have now surpassed the highs from 8^th Mar with Brent and WTI both up about 2.5$/bbl in the last week.
• Brent JUL 22-AUG 22 down -0.16$/bbl at 3.71$/bbl
• Brent AUG 22-SEP 22 up 0.21$/bbl at 3.07$/bbl
• Brent DEC 22-DEC 23 up 0.24$/bbl at 14.44$/bbl
• WTI JUL 22-AUG 22 up 0.04$/bbl at 2.88$/bbl
• WTI AUG 22-SEP 22 up 0.06$/bbl at 3.06$/bbl
• WTI DEC 22-DEC 23 up 0.32$/bbl at 15.04$/bbl
• The graph below shows the change in forward curve since last week.

Source: Bloomberg