OIL: Crude Backwardation Edges Stronger After Softening on Oversupply Risks

The crude curve backwardation is recovering slightly today after the weaker trend seen in recent weeks in line with the bearish market sentiment.  Spreads are weighed by risk of market oversupply in 2025 and despite reports last week that OPEC will delay the production increase, previously planned for October, by two months.

• The Dec24-Dec25 spreads last week fell to the lowest since late 2021. The Brent Dec24-Dec25 spread is down from $4.16/bbl on Aug 26 to a low of $0.74/bbl on Sept.6 while the WTI spread is down from $4.56/bbl on Aug 26 to a low of $1.05/bbl in the same period.
• The prompt spread has also softened since late August from $0.97/bbl on Aug 29 to a low of $0.33/bbl last week despite previous support from tighter supplies due to Libya outages, recent US crude stock draws and Kazakhstan maintenance.
  • Brent NOV 24 up 0.7% at 71.56$/bbl
  • WTI OCT 24 up 0.8% at 68.23$/bbl
  • Brent NOV 24-DEC 24 up 0.07$/bbl at 0.42$/bbl
  • Brent DEC 24-DEC 25 up 0.27$/bbl at 1.17$/bbl
  • WTI OCT 24-NOV 24 up 0.04$/bbl at 0.73$/bbl
  • WTI DEC 24-DEC 25 up 0.33$/bbl at 1.52$/bbl