Steep Backwardation Typically Marks Crude Price Peaks The one-year-back WTI crude oil future, at about $77 a barrel on May 15, indicates where prices may be headed, if history is a guide. The recent surge in front vs. further-out prices reached a lifetime crude futures extreme in 1Q. About 27% backwardated now vs. the front near $105 remains historically stretched -- especially with storage plus financing costs of about 10%. My graphic highlights the increasing tendency for spikes in backwardation to set market peaks since the $147 high in 2008. The world has changed from about 18 years ago when the US was the top crude importer. Now the largest producer and a net exporter, lower back futures prices reflect producer hedging and a primary trend in crude: growing US supply surpluses. WTI storage costs at roughly 5% and gold's 4.5% contango imply about 10% contango for WTI. Full report on the Bloomberg here: https://blinks.bloomberg.com/news/stories/tf2mh9kgifuh {BI COMD} #crudeoil #futures @BBGIntelligence(Mike McGlone)