EnergyScan

Overheated

As crude prices continued to rally, with ICE Brent crude prices reaching 80 $/b at the prompt, we are starting to see signs that the physical market and prompt pricing are diverging from longer-dated futures. Indeed, ICE Brent prompt time spread weakened to 79 cents yesterday, at odds with the flat price dynamic. Angolan supplies rose as cargoes for November loading emerged on Monday, adding to the backlog of a part of the October-loading Nigerian loading program, still unsold by lack of buying interest. Nigerian and Angolan grades in the current refining backdrop should be bid up by refiners, as their light sweet composition makes them valuable for refiners who want to curtail natural gas consumption in their hydrotreating/hydrocracking units. Yet, pricing remained worrisome for these grades. Murban futures flipped to a contango at the prompt, after the UAE increased their volumes offered for delivery. Even by looking at financial factors, the dollar continued to strengthen, which usually dents crude oil flat prices, while 10y Treasury yields continued to rise to 1.53%, and inflation expectation only increased moderately, indicating a riskier environment, usually detrimental for commodity futures.

Energyscan oil news

Ahead of the OPEC+ meeting, which should increase volatility, we remain cautious about the latest market moves in crude outright prices and see increasingly worrisome signs coming from physical crude prices.

Share this news :
Share on twitter
Share on linkedin
Share on email

You might also read :

ES-gas
April 13, 2021

Sharp increase in European prices

European gas prices increased sharply yesterday, supported by cold weather and weak pipeline supply. Indeed, although they increased yesterday to 300 mm cm/day on average,…
ES-economy
July 22, 2021

Broad rebound in risky assets

Concerns about the spread of the Delta variant seem to have significantly diminished suddenly: bond yields rebounded, the US 10y nearing 1.3%. Stock markets were…
ES-gas
February 24, 2021

European prices rebounded

European gas prices rebounded yesterday, supported by lower pipeline supply and forecasts of lower temperatures. Indeed, due to a series of unplanned outages, Norwegian flows…
Join EnergyScan

Get more analysis and data with our Premium subscription

Ask for a free trial here

Subscribe to our newsletter

Don’t have an account yet?  Sign up here!

[booked-calendar]