At first glance, oil prices have rallied -- a lot.

Look closer, however, and the market is still pricing the " lower-for-longer" mantra, much as it did at the beginning of the year.

Front-month futures for West Texas Intermediate, the U.S. benchmark, have risen 21 percent this year, but the recovery looks very different if you focus on the longer term. The five-year-forward WTI contract fell 2.6 percent over the same period, reflecting the view that shale oil production could rebound as prices recover, capping any rally.

“The markets may be getting ahead of themselves,” Michael Wittner, an oil analyst at Societe Generale SA in New York, said in a note to clients. “We still believe sustained front-month WTI at $45 to $50 will be self-limiting, as U.S. shale-producer spending and drilling would stabilize and perhaps recover.”

Forward contracts offer clues -- although not forecasts -- about where people who buy and sell oil believe prices are heading. While investors generally trade short-term contracts, long-dated futures are also important because they allow producers -- notably U.S. shale companies -- and consumers to lock in prices and manage their risk.

Production Warnings

The "lower-for-longer" price view still has some notable detractors.

Some of the most senior people in the industry including Patrick Pouyanne, chief executive officer of French giant Total SA, and Fatih Birol, the executive director of the International Energy Agency, have warned repeatedly that investment cuts triggered by the current slump could lead to a production shortfall in the future. Wood Mackenzie Ltd., an industry consultant, estimated in February that explorers have canceled or delayed investments worth almost $400 billion since prices started their slide in late 2014.

Price movements don’t suggest investors are heeding these calls. Front-month WTI prices have risen about $7.31 a barrel this year as investors bet that supply and demand would start to come into balance, eventually ending the glut. Over the same period, the longest-dated WTI contract, for delivery in late 2024, has fallen almost 70 cents.

Although forward oil prices aren’t a predictor, they often signal an anchor for the long term.