The future of the oil market may resemble the past — specifically the 1990s — according to Goldman Sachs Group Inc.
That’s when prices remained steadily in backwardation, a market structure where near-term futures are costlier than later contracts — reflecting tight supplies in the present and ample barrels further out, analysts including Damien Courvalin wrote in an April 8 report.
The phenomenon may persist as OPEC exits its current output cuts aimed at averting a global glut, adding supply back to the market in a move that would weigh on long-dated prices, Goldman said. That will maintain backwardation and lead U.S. shale drillers to limit activity, according to the bank. rket in a