OIL: Near Term Crude Backwardation Softens

Near term crude curve backwardation is softening with the prompt spreads falling towards the low end of the narrow range seen since mid October under pressure from soft China demand as the market weighs any potential impact of the Trump administration.

• Uncertainty also surrounds OPEC+ production in 2025 after the latest delay to the planned output hike to the end of the December.  The market remains wary of a possible surplus next year amid potential for higher OPEC+ output, weak China demand and growing non-OPEC+ supply.
• The OPEC+ group is expected to decide production policy for January at the minister meeting planned for Dec. 1.
• The Brent prompt spread has eased down to around $0.33/bbl compared to a high of $0.60/bbl in early October but above a low near $0.24/bbl in late September prior the first OPEC output hike delay.
• The Brent Jun25-Dec25 spread has edged back down to $1.18/bbl from a high of $1.39/bbl on Nov. 5 but compared to lows around $0.24/bbl in September.
  • Brent JAN 25 down 0.2% at 74.76$/bbl
  • WTI DEC 24 down 0.4% at 71.41$/bbl
  • WTI-Brent up 0.02$/bbl at -3.75$/bbl
  • Brent JAN 25-FEB 25 down 0.02$/bbl at 0.33$/bbl
  • Brent JUN 25-DEC 25 down 0.04$/bbl at 1.19$/bbl
  • WTI DEC 24-JAN 25 down 0.03$/bbl at 0.42$/bbl
  • WTI DEC 24-DEC 25 down 0.2$/bbl at 3.11$/bbl