Backwardation -- Saudis Could Be In Big Trouble -- July 2, 2023

Locator: 44875WTI.  

Backwardation. 

See this post, from just this past week, June 27, 2023 the Saudis "cry wolf" too many times.

Now, just a few days later, July 2, 2023, an article in The WSJ corroborates my thinking:

The oil market has sent a warning to Saudi Arabia and everyone else betting that prices are poised for a rebound: Don’t count on it.

The petroleum-rich kingdom throttled back output starting this weekend, part of a high-stakes gamble unveiled last month to crimp supply. Saudi officials think that demand will outstrip production later this year, teeing up a rally that will restore a gusher of profits to oil producers.

Analysts at the International Energy Agency and Wall Street banks agree that demand could return in the second half of 2023.

Trouble is, the oil market appears to be at odds with them. A key market indicator suggests traders believe that supplies won’t shrink for months.

And also: