Backwardation Signals Near-Term Oil Tightness, Not a Price Forecast
The article contends that Goolsbee misreads the oil forwards curve: backwardation signals tight near-term physical markets and the value of holding oil, not a forecast of lower prices in the coming months. It cites decades of evidence that futures curves poorly predict future spot prices, having signaled declines when prices rose in past cycles. While conditions could ease later this year, the curve alone does not justify assuming a long-run price drop.