Oil Prices Ignore the Warning Signs in Physical Markets

Oil price movements since the start of March this year have become the topic of dozens of discussions. Many have been puzzled by futures prices and why they haven’t gone through the roof given the severe disruption in Middle Eastern supply. It appears the reason is sheer optimism and a bet on market adaptability. However, there is a problem with that. Adaptability has limits. Many commentators like to compare the current oil price—and supply—situation to 2022, when Russia’s incursion into eastern Ukraine prompted an actual…