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2、s does and seeks to do business with issuers covered in its research reports.As a result,investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.Investors should consider this report as only a single factor in making their investment d

3、ecision.Refer to important disclosures on page 22 to 25.Analyst Certification on page 20.Price Objective Basis/Risk on page 18.12890700 The Oil Gusher Vol at the front,value at the back Industry Overview Key takeaways Bounce from$60:In the last 3 years,Brent has spent c330 days outside of our$60-80

4、range in spot-and 0 days in futures As a result,the Brent strip has shifted shape from backwardation to contango two years out We show how this flattening of the oil curve-plus negative positioning-has contributed to Big Oils equity re-rating Whats new?Shifting the shape of oil The shape of the oil

5、forward curve has shifted from backwardation of as much as$15/bbl in 2-year time spreads 18 months ago to mild contango today.In the process,spot Brent oil prices have dropped by$30/bbl from$90/bbl at the front of the curve.However,Brent strip has consistently stayed within a much narrower$65-75/bbl

6、 price range 2-years out along the forward curve and coincidentally underwriting our long-term fundamental$60-80/bbl Brent forecast range(unchanged throughout).So what?Storage incentives from contango The re-emergence of contango in oils forward pricing also increases expected returns from storage i