The Brent contango is now big enough for oil to bottom.
Crude Oil Brent (F) | QAG15 (Feb ’15) | 49.49 | ||||||
Crude Oil Brent (F) | QAH15 (Mar ’15) | 51.07 | ||||||
Crude Oil Brent (F) | QAJ15 (Apr ’15) | 52.55s | ||||||
Crude Oil Brent (F) | QAK15 (May ’15) | 53.76s | ||||||
Basically a trader can now sell a future month at a price high enough over the spot price to make it profitable to store oil for future delivery, after transport, storage, and financing costs.
That means traders will indeed take oil off the market and store it. Lower supply will then tend to raise the spot price.
Usually that would mean oil would start a trading range here.