Time Spreads Follow Crude Higher

Crude extends gains on a softer dollar after global growth concerns have brought front month Brent down 13% from 105$/bbl on Aug29.

• Next Brent technical resistance is at the 20 day EMA of 94.8$/bbl with WTI at 89.25$/bbl.
• The rising crude futures and ongoing supply risks have helped time spreads regain some ground in last couple of days. Spreads have been volatile but backwardation has gradually steepened over the last month due to uncertainty over OPEC production, with risks for supply from Libya, Kazakhstan, and Nigeria.
• Trading volumes are low with front month market implied validity easing back after reaching 50% last week. Despite changes in the futures market the options skew remains to the downside with puts trading around 3.5% over calls in the Dec22 contract.
  • Brent NOV 22 up 2.9% at 91.77$/bbl
  • WTI OCT 22 up 2.9% at 86$/bbl
  • Gasoil SEP 22 up 0.1% at 1076.5$/mt
  • WTI-Brent down -0.18$/bbl at -6.34$/bbl
  • Brent NOV 22-DEC 22 up 0.24$/bbl at 1.14$/bbl
  • Brent DEC 22-DEC 23 up 0.69$/bbl at 9.08$/bbl