Publications: Notes at the Margin

Twelve Weeks to Backwardation (July 17, 2017)


The WTI crude market is three months away from backwardation, at least as measured by the sixth crude spread (sixth future less cash). The market will meet this schedule if Cushing inventories continue to fall at a rate of two million barrels per day. The consequences—possibly a rush of cash from investors who have been sitting on the sidelines—are difficult to predict.


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