OPEC Monthly Oil Market Report, August 2021
Crude oil spot prices rose in July, m-o-m, as physical market fundamentals and declining oil inventories continued to support oil prices. The OPEC Reference Basket (ORB) averaged $73.53/b in July, representing an increase of $1.64, or 2.3%, m-o-m, the highest level since October 2018. Year-to-date, the ORB was up $25.43, or 63.8%, compared with the same period last year, to average $65.27/b. Crude oil futures prices also extended gains in July, buoyed by the outlook for strong oil market fundamentals. The ICE Brent front month increased by 88¢, or 1.2%, m-o-m to average $74.29/b in July, while NYMEX WTI gained $1.08, or 1.5%, m-o-m to average $72.43/b. Consequently, the Brent/WTI futures spread narrowed further in July by 20¢ to $1.86/b, its narrowest since October 2020. The market structure of all three major oil benchmarks remained in steep backwardation in July, as the oil market outlook remained robust and the market rebalancing process continued, amid a further decline in OECD oil stocks. However, hedge funds and other money managers sharply reduced their net long positions in July, particularly in WTI, after a selloff was seen in US equity markets and concerns heightened about the rapid spread of the Delta variant…
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