(Bloomberg) -- Has the U.S.'s massive strategic reserves release broken oil's rally? A look at crude's futures curve would certainly suggest it has.
Oil is still backwardated -- a bullish market structure where near-dated prices are pricier than those further out -- but it's eased to levels near where they were before Russia's invasion of Ukraine threw the market into turmoil.
The six-month timespread for West Texas Intermediate was $6.15 a barrel at 10:17 a.m. London time on Monday, compared with $7.05 at the end of Friday and $13.46 at the close on Wednesday before the U.S. announcement. The similar spread for global benchmark Brent crude also narrowed sharply.
The redrawing of the curve indicates the market is a lot less anxious about supply shortfalls since the White House said it would release 1 million barrels a day of oil from its reserves for six months.
But not everyone is convinced that prices won't rise again. Oil has fallen to levels that don't reflect the risks of further disruptions to Russian exports, according to Vitol Group, the world's biggest independent crude trader.
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