Kemp: Physical Oil Market Tightens As Refiners Scramble For Crude



The Brent spread between September and October 2017 has tightened to just 3 cents per barrel contango on Thursday, from 32 cents per barrel in the middle of June (http://tmsnrt.rs/2h8WiWA).

Other inter-month spreads have also tightened significantly with a tighter contango indicating traders now expect a lower level of inventories throughout the period (http://tmsnrt.rs/2h8Wk0E).

The physical crude market now looks significantly tighter than it did in the first half of June, which has coincided with a renewed rise in bullish hedge fund positions and a modest rise in spot prices.

The critical question is how much of this improvement is seasonal and how much will be sustained once summer is over.

(Editing by Susan Fenton)


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