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Crude Backwardation Softens Amid Ongoing Demand Concerns

OIL

The crude time spreads pull back as crude steadies following the recent rally seen in the last week. OPEC+ supply cuts specifically from Saudi Arabia and Russia have supported the crude curve backwardation but demand remains soft to limit upside moves.

  • The Brent Sep-Oct spread has pulled back from a high of 0.39$/bbl yesterday to 0.30$/bbl amid ongoing concern for global demand growth and the potential for further US Fed rate tightening next week.
  • IEA and OPEC reports today suggested opposing changes in demand forecasts to reports last month to bring overall demand of 2023 roughly in line with each other.
  • IEA has revised down its 2023 oil demand growth forecast by 220kbpd to 102.1mbpd, amid weaker manufacturing activity.
  • The OPEC MOMR has revised up its global oil demand growth forecast for this year by 0.1 mb/d to a total of 102mb/d amid higher oil demand from China during Q2 23.
    • Brent SEP 23 up 0% at 80.12$/bbl
    • WTI AUG 23 down -0.2% at 75.6$/bbl
    • WTI-Brent down -0.05$/bbl at -4.65$/bbl
    • Brent SEP 23-OCT 23 down -0.02$/bbl at 0.3$/bbl
    • Brent DEC 23-DEC 24 down -0.09$/bbl at 3.92$/bbl
    • WTI AUG 23-SEP 23 down -0.09$/bbl at 0.12$/bbl
    • WTI DEC 23-DEC 24 down -0.13$/bbl at 4.21$/bbl

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