Supply surplus expectations emerge as Brent crude prompt spread flips to contango since February

Odaily Planet Daily News As the US-Iran agreement reopens the Strait of Hormuz, increasing oil supply in the Middle East, the Brent crude prompt spread has turned to contango since February, meaning the price of the prompt month contract is lower than the next month's contract.

This structure typically signals expectations of a supply surplus. It is the latest in a series of signs that the oil market is weakening as physical crude premiums decline. Earlier today, Brent crude prices fell below $75/barrel for the first time since the outbreak of the Iran war. Before Brent crude shifted to contango, the Middle East Dubai market also showed a similar trend recently. (Jinshi)