Two Charts Signal U.S. Oil Isn't as Strong as It Appears to Be - Bloomberg

Two Charts Signal U.S. Oil Isn't as Strong as It Appears to Be - Bloomberg:

While U.S. oil has been swept up in a global rally for the past four weeks on growing fears of a supply crunch, a closer look at the futures market signals American crude is weakening.

West Texas Intermediate futures in New York are set for a fourth weekly gain -- the longest winning streak since January -- yet they’re trading near the biggest discount in almost four months to global benchmark Brent crude in London. Moreover, the premium of near-term WTI contracts over those for later has slid to the least since June -- indicating that a bullish market structure known as backwardation is fading.

While that may seem counter-intuitive at a time when concern is growing that higher Saudi and Russian output could reduce global emergency supplies, impending U.S. sanctions are taking out Iranian crude off the market and President Donald Trump is demanding lower prices, the futures are simply reflecting some situations specific to the American market.