Supply surplus expectations emerge, Brent crude’s nearest-month spread turns to contango for the first time since February

Odaily reported that as the U.S.-Iran agreement reopened the Strait of Hormuz, increasing oil supply in the Middle East, the nearest-month spread for Brent crude has turned to contango for the first time since February, meaning the front-month contract price is lower than the next-month contract.

This structure typically signals expectations of a supply surplus. It is the latest in a series of indicators showing the oil market is softening as physical crude premiums decline. Earlier today, Brent crude prices fell below $75 per barrel for the first time since the outbreak of the Iran war. Before Brent turned to contango, the Middle East’s Dubai market also experienced a similar trend in recent days. (Jinshi)