The U.S. oil market is on the brink of returning to a more bullish footing known as backwardation for the first time in six months, with the discount for prompt supplies vanishing as a domestic supply glut eases. The discount for prompt U.S. oil futures versus the second-month contract – a structure known as “contango” that signals a weak market – narrowed to its smallest in five months on Friday as strong demand and flattening production added to expectations that domestic stockpiles will continue to fall over the summer. If that spread flips to a premium, known as “backwardation,” it would come in sharp contrast to the global Brent futures, which is showing no signs of emerging from its 50-cent contango. On Thursday a prompt cargo of Forties crude, part of the European benchmark, traded at its lowest in 6-1/2 years. The prompt-month July contract for U.S. West Texas […]