Kemp: Brent Contango Is Hard To Square With Missing Barrels

However, past experience strongly suggests oil market rebalancing will be accompanied by a narrowing of the contango or even a return to backwardation.

In this respect, recent moves in the contango have been ambiguous. The contango is much narrower than in the first few months of 2015 but shows no sign of disappearing yet. (http://tmsnrt.rs/1TKU4sJ)

The contango in the Brent market does not suggest the market has swung from surplus to deficit yet. But it is hard to reconcile with predictions of continued enormous stock builds shown in some official statistics.

(Editing by Susan Thomas)


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