Outright crude crashes

By falling below 80 $/b, ICE Brent front-month future declined by close to 4.5% within a day. Yet, front-month time spreads remained supported, at 127 cents. The decline in US bond yields and Asian equity markets likely impacted crude prices. Global financial markets remain worried about the rise of a potential new variant found in South Africa. Furthermore, OPEC’s research panel continue to forecast inventory builds in Q4 21 and Q1 22 due to a seasonal slowdown in refining operations and the announced coordinated SPR release. In Europe, ARA stocks of diesel and jet fuel dropped significantly, with diesel stocks reduced by 175 kt w/w, which should continue to support European diesel despite the fears of an emerging COVID variant.