Backwardation and swagger: Crude market gets tight

The crude market’s got a bit of strut in its step again.

Prices are holding firm, buoyed by a robust US macroeconomic backdrop. Despite rate cuts getting pushed further out on the curve and tariff policy headwinds, demand — especially in the U.S. — isn’t flinching. Consumer resilience has not only rekindled risk appetite, with equities pushing higher, but oil is riding its coattails.

Brent is hovering above $69, WTI near $67. But this isn’t just another sentiment trade. Underneath the surface, the structure is flashing classic signs of tightness. The front end of the curve is in backwardation — a premium for near-term barrels that signals a market growing starved for prompt supply.

OPEC+ may be stepping off the brakes, relaxing cuts faster than expected, but pricing centers tell a tighter story. Yes, inventories have risen globally, but the real action is in regions that set the tone, such as Cushing, Oklahoma, where stocks remain lean. According to Goldman Sachs, the builds have piled up in locations that don’t swing the big bat when it comes to benchmark pricing.

That disconnect between headline inventory builds and accurate price-setting supply is sharpening the market’s focus on downside risks to production. In other words, supply risk is creeping back into the conversation, even if it’s not yet dominating it.

This isn’t about euphoria — it’s about mechanics. The physical market is firm, spreads are speaking, and traders are willing to pay a premium to get their hands on barrels now, not later. That’s a market with real tightness, not just sentiment fluff.

For now, oil remains supported — not by storylines, but by its structure.