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Crude Spreads Stronger on Week Despite Scepticism over OPEC Cuts

OIL

Crude backwardation has net strengthened this week as the prompt Brent spread has recovered after falling back to parity in mid November. The spreads softened slightly yesterday amid market disappointment surrounding the OPEC production cuts.

  • Ahead of the OPEC meeting yesterday the Feb24-Mar24 Brent spread reached the highest since Nov 7 at 0.4$/bbl. The WTI prompt spread is holding onto a narrow contango reflecting concern for an oversupplied market despite output cuts by the OPEC+ group.
  • The Jun24-Dec24 times spreads are however trading well below the highs seen in September and October having followed the front month back to near start of week levels.
    • Brent FEB 24 up 0% at 80.89$/bbl
    • WTI JAN 24 up 0.2% at 76.11$/bbl
    • Brent FEB 24-MAR 24 down -0.01$/bbl at 0.27$/bbl
    • Brent JUN 24-DEC 24 down -0.01$/bbl at 1.9$/bbl
    • WTI JAN 24-FEB 24 up 0.02$/bbl at -0.07$/bbl
    • WTI JUN 24-DEC 24 down -0.02$/bbl at 2.13$/bbl


Source: Bloomberg

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