Dan Caplinger

If you want it at a lower demand time, the price is going to be lower.

Right now, we have this huge disparity.

Front month, the current month, if you want oil right now,

$110 a barrel.

If you are willing to wait until the end of 2026, much lower, $40 a barrel lower, still $70

oil futures a year and a half out, they're only up $10 a barrel.

Prices of the front month are up like $50 a barrel.

What this is telling folks, this is a situation that's called backwardation in the futures markets.

What this is telling people is that at least the financial folks trading these futures don't think that oil supply is going to be a problem for very long.

They think that something's going to happen, supply is going to get restored, and prices are going to go back at least pretty

close to where they were before all of this started, which is a little bit surprising because we've got some folks saying things like, well, the infrastructure is all messed up and it's going to take a long time for everything to get back to normal.

There's a disconnect between what these futures markets are saying and what you're hearing a lot of experts talking about as far as the physical production and movement of oil across the global market.

I mean, just to underline that, the oil futures market does a lot of things.

It reflects a lot of things.

It reflects investor psychology.

It affects some form of speculation.

But also, immediate financial hedging is a big mover of markets here.

It does not reflect the underlying physical supply or demand for oil at any given time.

So, it's a tough thing to do right now, to look at it.

I think we need to focus on supply and what is actually in the refineries and not on the price, but that's a lot harder to look at.