Oil Market Could See Long Term Contango

The oil market could stay in a state of contango for longer after supply and demand finally balance due to the vast amount of crude and products in storage, Reuters reported on Friday, citing analysts and investment banks. Contango is the state of the market in which prices for delivery at later dates are higher than prompt prices—a market situation signaling oversupply and one which traders use to store oil for delivery at a later date. The opposite market situation—backwardation—typically occurs at times of market deficit and…