Oilprice.com The oil futures paper market is likely underestimating the massive supply disruption that a closed Strait of Hormuz is creating in physical crude and fuel supply globally. Crude futures prices briefly spiked early this week to $119 p...
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...er barrel, before retreating to the $90s and trading at $100 a barrel early on Friday in Asian trade. However, the premium of physical Dubai crude has surged to $38 per barrel over its paper equivalent, according to data compiled by Reuters columnist Clyde Russell. The state of a physical commodity selling at a premium to its paper value is called "backwardation." Usually, this is a "sell" signal for the market, but in the context of a supply shock, it means the opposite. Basically, the m...
...arket is assuming the supply will return soon but ths people buying the stuff are clamoring to get their hands on it now.