The U.S. benchmark entered contango for the first time since January of 2024: File Image/Pixabay
The new oil trading week kicked off as a carbon copy of the previous one, with the commodity lingering at a 5 month low as analysts fretted about a potential supply glut – and one key benchmark entering contango for the first time in over a year.
Brent on Monday settled down 28 cents at $61.01 per barrel, and West Texas Intermediate settled down 2 cents at $57.52; the Brent contango was trading at its widest since December 2023; WTI’s contango emerged for the first time since January of 2024.
The glut fears apparently were fuelled by a poll showing expectations for a rise in U.S. stockpiles last week, and the severity of the gloom wasn’t lost on John Kilduff, founding partner at Again Capital, who remarked, “These glut fears are now descending onto the market, particularly looking forward into 2026; we will start to see floating storage pick up and inland tanks get filled.
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This is a real bearish narrative that we have not seen in some time
John Kilduff, founding partner, Again Capital
“This is a real bearish narrative that we have not seen in some time.”
Yet, news on Monday leaned towards prospects of supply disruption, at least in the near term, case in point: pundits worried that the escalating U.S./China trade war could disrupt global freight flows.
Meanwhile, ongoing uncertainty continued over Russian oil supply in the midst of efforts to end the war with Ukraine – along with and U.S. president Donald Trump pressuring India to stop buying oil from the former Soviet Union.
Meanwhile, Forex.com noted that the CBOE OVX Index had begun to rise in the short term, approaching the 40-point level “and reflecting an increase in implied volatility for crude oil….this uptick suggests growing uncertainty about oil’s future and the potential for sharp price swings, which could lead to deeper short-term corrections.”
In other oil news on Monday, while crude oil exports from Iraq’s semi-autonomous region of Kurdistan reached 205,000 barrels per day (bpd), the Kurdistand24 news outlet said the fragile agreement signed by the federal Iraqi government, the KRG, and most of the foreign firm operating in Kurdistan could unravel, due partly to the Baghdad government failing to pay to the international oil companies their contractually obligated financial dues to cover operational costs and investment returns,
Also on Monday, multiple sources told media that amid increasing sanctions on the country’s oil industry, Venezuela is betting on coal to jumpstart its resource economy and exports – and that since the restart of two key mines at the end of 2024, coal production reached about 3 million tons for the first quarter of 2025.