The contango structure of the oil futures curve is expected to persist for some time, according to Mohammad Alipour-Jeddi, head of the petroleum studies department at the Organization of Petroleum Exporting Countries.

Contango--a situation where near-term futures prices are cheaper than prices further into the future--is expected to boost oil inventories in storage, Alipour-Jeddi said at energy news and pricing agency Platts' crude oil markets conference.

The persistent contango "has provided a relatively risk-free financial incentive to build stocks," he said.

OPEC estimates that 80 million barrels of crude oil are being stored on floating tankers, while 46 million barrels of refined products are held in floating storage, Alipour-Jeddi added.

He said the oil price curve was unlikely to flip into backwardation, which reflects a near-term shortage, any time soon. Some analysts have predicted backwardation--where near-term futures prices are more expensive than deferred contracts--will return to oil markets later this year.
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