George PearkesApr 2
We are COOKING now, especially headed into a long weekend who wants to be short given all the potential for upside catalysts? *US OIL FUTURES EXTEND SURGE TO CLIMB ABOVE $110 A BARREL
Show threadGeorge PearkesApr 2
Front-month WTI (traded on NYMEX as referenced in the reply here) is for May delivery, front-month Brent is for June delivery. WTI is trading ~3.40/bbl over Brent, but they're not the same month. At close yesterday spot WTI at Cushing was $26.34/bbl below spot Brent; spread on June futs is $10.23.

RE: https://bsky.app/profile/did:plc:yrqnj7gfevnf7hts6dmutwjf/post/3mij7hf3b2c2t
Show threadGeorge PearkesApr 2
We are headed for the deepest backwardation across the front two WTI contracts on record if the current levels hold through the close. Only other period that comes close was in September of 2008 (week TARP was announced and WaMu failed).
Show threadGeorge PearkesApr 2
As @[email protected] has pointed out, backwardation drives #$USO higher than spot or front-month crude, because it's constantly selling the closest-to-delivery futures (high) and buying deferred futures (low). Crude curves have had a small backwardation since 2021, but this turbo-charges it.
Show threadGeorge Pearkes
Post above is not investment advice, OBVIOUSLY. You have no idea how long this backwardation will last and it takes a while for it have a real impact on USO relative to prompt crude so, y'know, don't go pile into this trade because you read my post.
Apr 2 at 1:51pmWeb