The oil futures curve

Crude oil saw a massive rise from 2000-2008. This was absolutely driven by China demand. OPEC spare capacity went to close to zero.

What is interesting to check is the futures curve. The futures curve before 2000 has always been stable and slightly backwardated. But the sudden shift of China demand created severe backwardation from 2000 onwards. This tells you that a backwardated futures curve doesn't mean that oil should go down in the coming years. It actually tells you there is something going on that makes oil go up. This was China.

Now we see the same thing since 2022. A lot of backwardation. This time it's not really a demand driver, but it's a supply constraint that moved oil in backwardation. OPEC spare capacity is back to zero and oil is headed higher.