Physical oil market gains suggest more support for futures rally
LONDON/SINGAPORE/NEW YORK, June 22 (Reuters) – Crude oil values in many parts of the world are rising on stronger demand and tighter supply, suggesting physical markets are catching up with a futures rally and providing more fundamental support for prices, traders and analysts say.
Brent futures have rallied over 40% in 2021, boosted by output curbs led by the Organization of the Petroleum Exporting Countries and it allies, and on hopes of recovering demand. But, until recently, physical markets lagged, traders said.
A lack of or limited arbitrage opportunities to send crude from the Atlantic Basin to Asia, and from the United States to Europe, also helped drive up crude values, meaning each region…