Page 35 - Policy Economic Report- June'26

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

improve and prices to moderate over time. In this illustration, both Brent and WTI crude futures follow a
downward-sloping curve, with Brent futures trading at a premium to WTI futures throughout the period.

Source: London stock exchange Group (Prices as of March 25, 2026)
Conclusion
Backwardation generally signals strong current demand or constrained supply, leading to higher short-
term commodity prices. While it benefits commodity-exporting economies and producers, it increases
costs for import-dependent countries, contributes to inflationary pressures, discourages inventory
accumulation, and shapes expectations about future market conditions.

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