© Reuters. Oil Steadies After Surge as Investors Assess Tightening Market
(Bloomberg) — Oil was steady in early Asian trading after jumping the most in four weeks amid signs of a rapidly tightening U.S. market.
Futures in New York traded near $73 a barrel after surging 2.8% Monday. The market continues to firm in a bullish structure, with one timespread for expanding to the widest backwardation in seven years. Genscape Inc. reported stockpiles at the key American storage hub of Cushing fell again last week from the lowest level since March 2020, according to people familiar.
Oil is up more than 50% this year as a robust rebound from the pandemic in the U.S., China and Europe drives increasing fuel consumption, although a Covid-19 comeback in parts of Asia is a reminder that the recovery will be uneven. Global benchmark may even surge to $100 a barrel next year as travel demand rebounds, according to Bank of America Corp (NYSE:).
One bit of bearish news amid all the optimism is China’s crackdown on the nation’s private refiners. A second batch of 2021 crude import quotas allocated to the independents was about 35% less than last year amid Beijing’s investigation of the sector.
The prompt timespread for Brent was 85 cents in backwardation — where near-dated prices are more expensive than later-dated ones — on Monday. That compares with 57 cents at the start of last week.
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