348 Forward oil curves are showing an unprecedented level of backwardation — nearly $19 per barrel for Brent and $23/bbl for West Texas Intermediate.Several years of underinvestment in fossil fuels have collided with too much stimulus money and prompted persistent price spikes, fueling speculative confidence.Lower hedging levels are drying up market liquidity and increasing volatility. Save for later Print Download Share LinkedIn Twitter Pervasive economic uncertainty has done little to dissuade market bulls from surrendering long oil trades. So far the post-pandemic rebound has been met with spare capacity concerns, a decade-long gap in capital expenditure leading to irreversible declines, and too much demand stimulus floating around, the bulls are arguing. Put the green transition into this mix and energy prices can only rise to higher levels, they add.
