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OIL
Crude backwardation is holding steady today as futures trade near to previous close levels ahead of the US CPI data release and after the IEA monthly oil report.
- Backwardation has softened over the last month amid concern for demand growth in US as well as China and Europe while supply has been stronger than expected. Upside moves have been limited despite upward revisions to both OPEC and IEA global demand growth forecasts. A stronger US CPI print would be negative for crude as it may signal further Fed tightening, which could impact energy demand.
- The WTI prompt time spread is holding a narrow backwardation after falling into contango last week ahead of the Dec23 contract expiry on 20 Nov while the Brent Jun24-Dec24 spread is just above the lowest since July.
- IEA showed global oil demand growth for this year revised up by 100kbpd to 2.4mbpd to 102mbpd, driven by China. Global oil supply was revised up by 200kbpd to grow by 1.7mbpd to 101.8mbpd this year due to higher growth from the US and Brazil.
- Brent Jan24 contract technicals suggest the bearish theme remains intact after the short term corrective bounce. Current support is at a Fibonacci retracement point at 78.89$/bbl while key resistance is up at the Nov 3 high of 87.80$/bbl.
- Brent JAN 24 down -0.2% at 82.33$/bbl
- WTI DEC 23 down -0.2% at 78.11$/bbl
- WTI-Brent down -0.01$/bbl at -4.3$/bbl
- Brent JAN 24-FEB 24 unchanged at 0.33$/bbl
- Brent JUN 24-DEC 24 up 0.02$/bbl at 1.98$/bbl
- WTI DEC 23-JAN 24 up 0.02$/bbl at 0.09$/bbl
- WTI JAN 24-FEB 24 up 0.02$/bbl at 0.22$/bbl
- WTI DEC 23-DEC 24 up 0.12$/bbl at 3.63$/bbl
Source: Bloomberg
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.
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