Oil Futures Market Finally Signals Supply Tightening – OilPrice.com

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Prompt spreads in the futures market have returned to backwardation, from contango. 
Contango is the state of the market in which prices for delivery at later dates are higher than front-month prices—a market situation signaling oversupply. The opposite market situation—backwardation—typically occurs at times of market deficit, and in it, prices for front-month contracts are higher than the ones further out in time.   
Last week, the six-month spread in Brent flipped to contango for the first time since December 2022, after being in backwardation for months. The U.S. benchmark, WTI Crude, also dropped into contango on June 27, for the first time since March.  
But in recent days, prompt spreads have strengthened, swaps contracts linked with physical supply have surged, and in options markets, the premium of bearish puts over bullish calls has narrowed.
On Monday, Saudi Arabia and Russia announced nearly at the same time fresh cuts to global oil supply.