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Crude Backwardation Steady Despite Upside Risk from Middle East


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

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