Global oil markets are gradually rebalancing, but progress has been slower and more uneven than the Organization of the Petroleum Exporting Countries and bullish hedge funds expected. OPEC as well as most commentators, crude traders and hedge funds have assumed the rebalancing of the oil market will be accompanied by a shift from contango towards backwardation in oil futures prices. Officials at the producer group have focused on the shift to backwardation as a key indicator of whether their policies are working. Hedge funds and physical traders appear to have been trading around the futures curve as they speculate on when and how quickly the oil market will tighten. But OPEC officials acknowledged in Houston last week that the rebalancing and the shift to backwardation had not […]