Prompt oil prices hit record premium to next-month delivery after Trump vows to keep attacking Iran

By Georgina McCartney and Arathy Somasekhar

HOUSTON, April 2 (Reuters) - Front-month U.S. crude oil futures were trading at their largest-ever premium over the second-month contract on Thursday as traders scrambled for barrels after U.S. President Donald Trump vowed to continue attacking Iran.

Widening backwardation, the market term for immediate deliveries trading at a premium over barrels scheduled for delivery in a later month, suggests investors perceive supplies will be short in the near-term.

WTI crude futures for May delivery were trading around $15.70 per barrel higher than the June contract during the session.

The U.S.-Israeli war on Iran, nearing the end of its fifth week, has removed millions of barrels per day of oil from the global market, driving energy prices to multi-year highs and causing fuel shortages in countries reliant on oil and gas flowing through the Strait of Hormuz.

Around 20% of the world's oil flows through that critical chokepoint. Trump, in his Wednesday evening speech, vowed to hit Iran "extremely hard" in the next two to three weeks, but did not lay out a plan to open the Strait of Hormuz. He has in recent days suggested other nations should take the lead to clear the path for shipping traffic in the strait.