Stock Drawdowns And Tight Supply Extend Oil's Backwardation

What happened: The Middle East conflict, in its eighth month, has drained global oil stockpiles and strengthened backwardation across crude, diesel and gasoline futures, CME Group data shows. Key numbers: Inventories fell more than 500 million barrels since February 2026, or 2.8 million barrels per day. Why it matters: Backwardation encourages drawing barrels from storage, making stockpile rebuilding increasingly difficult. Diesel's record premium over crude reflects tight refining capacity and export demand, and options open interest shifted toward higher strikes.

The Middle East conflict, in its eighth month, has drained global oil stockpiles and strengthened backwardation across crude, diesel and gasoline futures, CME Group data shows.

Backwardation encourages drawing barrels from storage, making stockpile rebuilding increasingly difficult. Diesel's record premium over crude reflects tight refining capacity and export demand, and options open interest shifted toward higher strikes.