Tight Physical Crude Market Points To Higher Oil Prices

Prices of physical crude cargoes have rallied this year, signaling resilient global oil demand even in the face of record-high COVID cases in the Omicron wave. Crude grades from the United States, Africa, the North Sea, the Middle East, and Russia have seen a significant increase in their prices in recent weeks, suggesting that the physical demand for oil is tight across the world.  The tightness in the physical crude prices is reflected in the oil futures market where the backwardation—the state of the market signaling tight supply—has…