Kolibri Global Energy Inc BNKPF

RE:us wti curve

[BrokerG]

Hello Carbonbull

Backwardation is the result of an imbalance in supply and demand. If the market is currently experiencing a shortage of supply, backwardation will result. How a few oil companies in the US are financed is an extremely small piece of this process.

Backwardation was most likely caused by the recent OPEC agreement to limit supply. This will eventually correct itself and normal contango will re-emerge. BNK has used hedging in the past and continues to do so. This is reasonable for a small firm with debt, in order to reduce bankruptcy risk. The downside is we have less torque from increasing oil prices.