OPEC Monthly Oil Market Report, December 2020
Crude Oil Price Movements
Spot crude prices settled sharply higher in December, extending the previous month’s gains, buoyed by a further improvement in physical market fundamentals and strong crude buying from the Asia Pacific region. The OPEC Reference Basket increased by $6.56, or 15%, month-on-month (m-o-m), to stand at $49.17/b in December. However, in annual terms, the ORB dropped $22.57, or 25%, to average $41.47/b in 2020, which represents the lowest yearly average since 2016. Crude oil futures prices extended their previous month’s surge in December, rising sharply on both sides of the Atlantic. The ICE Brent front month rose by $6.24, or 14.2%, m-o-m in December to average $50.22/b, while NYMEX WTI gained $5.72, or 13.8%, m-o-m to average $47.07/b. As a result, the Brent-WTI spread widened 52¢ to average $3.15/b in December. The price structure of the forward curve strengthened further in December. The ICE Brent stood in shallow backwardation for most of the month, while DME Oman and Dubai remained in strong backwardation. However, the WTI structure remained in contango. Hedge funds and other money managers continued to boost bullish positions, providing additional momentum to the steady ongoing gains in crude oil prices.
To download the full report CLICK HERE
