February 13, 2025 11:50 GMT
OIL: Crude Backwardation Continues to Soften Amid Surplus Risks
OIL
Crude curve backwardation continues to soften this week as futures have fallen to technical support levels amid potential Ukraine peace talks and signs of softening Israel/Hamas tensions.
- Prompt WTI and Brent crude time spreads have fallen to the lowest since mid November amid a potential supply surplus this year despite recent supply disruption due to sanctions.
- OPEC this week kept its global oil demand growth forecast for 2025 unchanged at 1.45mb/d while the EIA STEO increased its expectations of excess supply in 2025 and 2026. IEA today however sees the surplus narrowing after a modest increased in global oil demand growth to 1.1mb/d.
- President Trump’s pledge to increase production and current OPEC+ plans to raise output from April could add to oversupply this year.
- The longer dated Jun25-Dec25 spread are also softening back to levels seen in early January after the spike higher to a peak on Jan. 15 amid concern for the impact on supplies from US sanctions on Russian and Iran. Brent has fallen from a peak of $3.74/bbl to $2.26/bbl but remains above levels below $1.5/bbl seen in Q4 2024.
- Brent APR 25 down 1.1% at 74.38$/bbl
- WTI MAR 25 down 1.2% at 70.52$/bbl
- Brent APR 25-MAY 25 down 0.03$/bbl at 0.28$/bbl
- Brent JUN 25-DEC 25 down 0.16$/bbl at 2.25$/bbl
- WTI MAR 25-APR 25 down 0.07$/bbl at 0.06$/bbl
- WTI JUN 25-DEC 25 down 0.13$/bbl at 2.28$/bbl

Source: Bloomberg
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