U.S. crude oil inventories are in a hurry! There was a "$100" signal for oil prices

The time spread of crude oil contracts soared to a multi-year high, the last time when the oil price was $100.
.
.

The culprit that has recently skyrocketed crude oil prices is not soaring natural gas prices or OPEC+ limited supply, but the Cushing crude oil storage center
in the United States, the world's largest oil storage base and the main delivery place for US crude oil futures.

Traders are worried about the imminent
fall of Cushing crude inventories.
Time spreads, which measure the health of the crude oil market, have soared to a multi-year high and have now affected Brent prices
.

Compared to forward crude oil, the high spot crude oil price reflects the current situation of short supply in the crude oil market
.

For U.
S.
crude, the premium for near-term contracts over five-month later contracts was the largest since 2018, when inventories in Cushing were near operating
lows.
The December-December spread, favored by world oil hedge funds, hit its highest level since 2013, when the average price was close to $
100 a barrel.

WTI crude prices are at the smallest discount to Brent crude prices since April 2020, a move intended to curb U.
S.
crude outflows
.
At the same time, this will make the price of North Sea crude oil of the same grade soar, and it will also attract more bulls to the Brent crude oil market
.
The much-watched crude oil futures spread for December this year and next year is only 60 cents
away from the record high.

Oil prices are already high, and OPEC+ production restrictions have brought a wave of bullish sentiment, with a large number of hedge funds pouring into the crude oil futures and options market
.
Last week, hedge funds and other fund managers bought the equivalent of 10 million barrels of crude oil into six of the most important futures and options contracts
.
The portfolio manager accumulated a net long position of 865 million barrels across all six contracts, which is 7 times the number of long positions
.

Saudi Aramco, the world's largest oil company, said global oil production is declining rapidly and oil producers need to invest more in production
.
The company's chief executive, Amin Nasser, said in an interview that this is a "big problem" and spare capacity is shrinking
.

Nasser noted that if the pandemic eases and more people travel by air, the supply gap in the oil market could worsen
in 2022.
Nasser said:

Some oil and gas traders have criticized the government and climate activists for calling on oil producers to stop investing in fossil fuels, saying it will lead to energy shortages
over the next decade.
Saudi Aramco is investing billions of dollars to boost its production from 12 million barrels per day to 13 million barrels per day, and is expected to complete the project
in 2027.

Nasser's forecast for next year is not in line with
those of some Wall Street banks and OPEC+ members.
JPMorgan said that by March next year, the oil market will shift from the current supply gap of about 1.
5 million barrels to a supply glut
of 1 million barrels.

Kit Haines, an analyst at Energy Aspects at the Global Energy Commodities Institute, said:

As the recent rise in the cost of hydrogen has pushed up the price of natural gas, the cost of sulphur reduction has risen, and the price of sweet crude oil has also risen
as a result.
The premium for heavy acid crude in the Brent crude market reached a new high
since 2018.

The reasons behind the price all the way up need to be vigilant
.
Demand growth in Asia has supported the crude oil market, but demand has fallen
recently.
According to foreign media data, two 400,000-ton giant oil tankers have been floating in the waters of Southwold (688028) in the United Kingdom for more than one month
due to the lack of suitable Asian buyers.
The high premium for light crude is discouraging
Asian buyers.

Rampant bullish sentiment is also reflected in
speculative money flows.
The oil option stream suggests that investors are more inclined to be bullish than bearish
.
The Brent $100 call contract rose sharply in weeks, and open interest nearly doubled so far this month to more than 80,000.

There are also buyers
who buy contracts up to $150 and $200.

From the current situation, Brent crude oil prices closely follow the price of WTI crude oil as
investors bet more on light crude oil.
For the first time since 2019, the spread between the January-February contracts reached $1, and the February-March spread even exceeded $
1.
The last time the crude oil futures spread was at such a high level, the overall price of crude oil was about $100/barrel
.