Free Trial

Crude Backwardation Steady Despite Upside Risk from Middle East

OIL

Crude backwardation is holding relatively steady after seeing time spreads falling from a recent peak on 20 October.

  • Despite the upside risks to supply due to the conflict in Israel the Dec23-Dec24 spread has softened from a peak in late September with little impact on global oil flows so far. Brent Dec23-Dec24 is down to 7.3$/bbl from a high of 11.5$/bbl on 28 Sep but still elevated compared to levels below 4$/bbl in Q2 2023.
  • Backwardation is support by OPEC+ supply cuts but with concern for weak fuel demand ahead of the latest US Fed central bank meeting later this week.
  • Most time spreads are drifting lower today following the weaker flat price although the Brent Dec23-Jan24 spread is gaining ground ahead of the Dec23 contract expiry tomorrow.
    • Brent DEC 23 down -1.2% at 89.41$/bbl
    • Brent JAN 24 down -1.2% at 88.13$/bbl
    • WTI DEC 23 down -1.4% at 84.34$/bbl
    • WTI-Brent down -0.11$/bbl at -5.07$/bbl
    • Brent DEC 23-JAN 24 up 0.02$/bbl at 1.3$/bbl
    • Brent JAN 24-FEB 24 down -0.07$/bbl at 0.8$/bbl
    • Brent DEC 23-DEC 24 down -0.26$/bbl at 7.28$/bbl
    • WTI DEC 23-JAN 24 down -0.08$/bbl at 0.76$/bbl
    • WTI DEC 23-DEC 24 down -0.42$/bbl at 6.94$/bbl

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.