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Crude Flat as IEA Lower Demand Forecast but Warn of Price Cap Supply Risks

OIL

Crude back to flat on the day after Brent earlier pushed back above 93$/bbl.

  • IEA today reduced their forecast for global oil demand growth but also warned of upside risks following the OPEC+ production cuts. They warned that the US oil price cap plan could backfire if Russia halt flows to countries implementing the cap and reduce overall output. Any reduction in production could drive prices higher and negatively impact the global economy.
  • Concerns for the tight global supplies and limited spare capacity are supporting Brent and WTI curve backwardation. Time spreads have drifted slightly lower this week but are still near the highest since June or July.
    • Brent DEC 22 unchanged at 92.45$/bbl
    • WTI NOV 22 down -0.1% at 87.18$/bbl
    • WTI-Brent up 0.03$/bbl at -6.49$/bbl
    • Brent DEC 22-JAN 23 down -0.04$/bbl at 1.59$/bbl
    • Brent JAN 23-FEB 23 up 0.01$/bbl at 1.67$/bbl
    • Brent DEC 22-DEC 23 unchanged at 12.23$/bbl

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