Deutsche Bank analysis shows backwardated Brent futures near $90 limit economic shock risks, bolstering equities despite geopolitical concerns.
Risk assets have remained resilient despite heightened geopolitical tensions and rising long-dated oil prices, as the Brent futures curve stays heavily backwardated. The backwardation signals market expectations of a temporary oil shock rather than a sustained price surge.
Six-month Brent futures hover just above $90 per barrel, a level analysts argue is less economically disruptive due to declining energy intensity. The gap between front-end and six-month futures has remained elevated, reinforcing the view that the current spike may not trigger a broader market selloff.
Government bond yields have reached multi-year highs, yet equities have held steady, reflecting confidence that the oil price impact will be short-lived. The curve’s structure suggests traders are pricing in a reversion rather than a prolonged supply crunch.