After OPEC’s first output cut in eight years, long-dated oil futures spreads flipped into positive territory for the first time in two years on Thursday, suggesting an end to the global crude glut is in sight. The tell can be found in a trade known as “Dec Red” – the spread between the December 2017 and 2018 U.S. crude futures contracts CLZ7-Z8. That trade, a popular one in oil markets, flipped on Thursday for the first time since October 2014, as the 2017 contract is now trading at a higher price than the 2018 contract. The “red” term is one used to refer to a same-dated contract one year in the future. This is known as backwardation – when later-dated contracts are cheaper than near-term contracts. It is a signal that traders expect bloated inventories in storage around the world may start to rapidly draw down, after years of […]