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Crude Backwardation Softens As Futures Ease Lower

OIL

Crude time spreads are easing back today as futures drift off from the highs of the year seen yesterday.

  • The prompt Brent spread is down from 0.77$/bbl yesterday but remains strong compared to as low as 0.25$/bbl on 23 Aug amid low global supplies and with Saudi expected to extend production cuts into October.
  • Trading volume was thin yesterday due to the US holiday with just 382k ICE Brent contracts trading compared to 1.14m on 1 Sep.
  • Technicals remain bullish with Brent support at the 20 day EMA at 85$/bbl and resistance at yesterday’s high of 89.22$/bbl.
    • Brent NOV 23 down -0.8% at 88.29$/bbl
    • WTI OCT 23 down -0.3% at 85.26$/bbl (vs 1 Sep close)
    • Brent NOV 23-DEC 23 down -0.07$/bbl at 0.68$/bbl
    • Brent DEC 23-JAN 24 down -0.03$/bbl at 0.67$/bbl
    • Brent DEC 23-DEC 24 down -0.25$/bbl at 5.83$/bbl

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