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Brent Front Month Trading Higher but Prompt Spread Falls Towards Parity

OIL

Crude front month futures have reversed the earlier decline back to positive on the day with longer dated spreads following the move supported by risks from OPEC+ supply uncertainty. Crude markets had earlier seen downward pressure amid a wider market decline in risk appetite.

  • The prompt Brent spread however continues to weaken suggesting a looser near term balance with Jan24-Feb24 almost back to parity.
  • The near term options market is holding the bearish skew ahead of the Jan24 options expiry today with the second month WTI call-put skew narrowing very slightly from -6.15% on Friday to -5.75% today.
    • Brent JAN 24 up 0.2% at 80.74$/bbl
    • WTI JAN 24 up 0.3% at 75.78$/bbl
    • WTI-Brent up 0.08$/bbl at -4.96$/bbl
    • Brent JAN 24-FEB 24 down -0.08$/bbl at 0.02$/bbl
    • Brent JUN 24-DEC 24 down -0.04$/bbl at 1.79$/bbl
    • WTI JAN 24-FEB 24 up 0.01$/bbl at -0.22$/bbl
    • WTI DEC 23-DEC 24 up 0.24$/bbl at 2.55$/bbl

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