How a wrinkle in the oil futures market has clogged America's oil pump
The U.S. is still the largest producer of oil, but we're a long way from pumping what we were before the pandemic. Blame backwardation.
The oil market right now is what the experts like to call 'tight.' They're referring to the supply side of the supply-demand equation: the amount of oil being released onto the market is comparatively low, or tight. Demand for oil, on the other hand, is high, and as every reader of this newsletter knows, when supply struggles to meet demand, prices go up.
Demand is high because the global economy has come roaring back at what we hope is the tail end of the pandemic: as factories restart and people start getting back on the roads and up in the air, oil and all of its byproducts have become essential again. And energy companies are increasingly chasing oil as well now, thanks to that has pushed many of those companies to.
