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Crude Falls Towards Lows of the Year

OIL

Crude falls further towards the lows of the year with first support at the Jan 3 low of 74.79$/bbl. Weak US demand sentiment, a reduction in Saudi OSP and strong non-OPEC supply continue to weigh on prices while fund net long positions fell last week.

  • Bank of America cuts the Brent crude forecast for 2024 from $90/bbl to $80/bbl on supply growth according to Bloomberg. The forecast shows Brent averaging $78/bbl this quarter, down from $90/bbl previously.
  • The near term Brent 25 delta call-put skew has widened slightly today although the spread is still less bearish than seen at the start of the year. Brent crude second month skew is today at -2.2% and WTI second month skew is -2.95%.
    • Brent MAR 24 down -4% at 75.62$/bbl
    • WTI FEB 24 down -4.5% at 70.48$/bbl

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