"With regards David's 23rd December comments on the United States Oil Fund (USO) WTI Crude Oil ETF and contangos, and on Brent crude currently leading WTI higher, it's worth noting that Brent has recently entered a modest backwardation. Perhaps this is indicative of supply tightening? Regardless, the backwardation tailwind (ensuring contract rollover is profitable rather than costly as it is when in contango), if it persists, may encourage speculative interest via futures (and ETFs).

"The London listed OILB ETF tracks Brent crude, and the backwardation can be monitored via the Chart Library using the 'Relative (difference)' charting functionality for the 1st and 2nd month contracts for Brent (Crude Oil IPE)."

David Fuller's view Thanks for making this good point. There is a small backwardation for Brent crude, possibly due to the recent and unusually cold weather in Europe, and although it only extends over the next two contract months (March & April 2011) prices are currently flat extending into 2012, as you can see from this Contracts Table from Bloomberg. Eoin has also added the CO1 - CO2 'Relative (difference)' chart which you created to the Library.