The growing optimism in the oil market in recent weeks has resulted in tangible evidence that traders expect an increasingly tighter crude market going forward this year. Oil market participants now expect OPEC’s cuts and U.S. sanctions on Venezuela and Iran to continue to tighten the market through the end of 2019. The evidence is that the Brent Crude calendar spread for the second half of this year has flipped into a backwardation of as high as US$0.90 a barrel, compared to a contango of US$0.70 at the end of last year, Reuters market analyst John Kemp notes . Backwardation is the market situation in which front-month prices are trading at a premium compared to prices further out in the future—a sign of a tighter or undersupplied market. In the opposite structure—contango—front-month prices are lower than prices out in the future months—pointing to a crude oil oversupply and making […]