Crude Time Spreads Spike Higher on Tighter Supply

Crude time spreads have followed the move higher in crude futures after Saudi extend the 1mbpd voluntary production cuts and Russia extend the 300kbpd export cut for three months until the end of the year. Russia again did not specify a baseline for the export cuts.

• Whilst the announced is not entirely unexpected the countries had been announcing the output cuts on a month by month basis in the last couple of months.
• The prompt Brent spread has recovered earlier losses to trade above the highs from yesterday to the highest since November with the OPEC+ cuts supporting a market deficit this year.
• The Dec23-Dec24 spread has followed the move to the highest since Jun 2022.
• Brent Nov23 has traded through the psychological round number resistance at 90$/bbl with next resistance up at the Nov 17 high on the continuation chart of 92.91$/bbl.
  • Brent NOV 23 up 1.8% at 90.56$/bbl
  • WTI OCT 23 up 2.2% at 87.44$/bbl (vs 1 Sep close)
  • Brent NOV 23-DEC 23 up 0.12$/bbl at 0.87$/bbl
  • Brent DEC 23-JAN 24 up 0.15$/bbl at 0.85$/bbl
  • Brent DEC 23-DEC 24 up 0.7$/bbl at 6.78$/bbl