OPEC Monthly Oil Market Report, December 2021
Crude Oil Price Movements: Crude oil spot prices declined in November, amid concerns regarding the emergence of the new Omicron COVID-19 variant, and easing of the energy crunch which had resulted in higher oil demand from the gas-to oil switching. The OPEC Reference Basket (ORB) value dropped by $1.74, or 2.1%, in November to average $80.37/b, amid lower prices of almost all medium and heavy sour grades in Asia, Europe, and the Americas. The year-to-date (y-t-d) ORB value reached $69.45/b, which is $28.71, or 70.4%, higher compared with the same period last year of $40.75/b. Similarly, crude oil futures prices ended November sharply lower amid higher volatility after a broad selloff in futures and equity markets, amid the emergence of the new Omicron COVID- 19 variant and easing concerns about an energy crunch. The ICE Brent first-month fell by $2.90, or 3.5%, in November to average $80.85/b, and NYMEX WTI declined by $2.57, or 3.2%, to average $78.65/b. DME Oman crude oil futures prices fell by $2.11 m-om, or 2.6%, to settle at $79.70/b in November. The spread between the ICE Brent and NYMEX WTI benchmarks narrowed further in November by 33¢ to average $2.20/b. Hedge funds and other money managers accelerated selling in November, contributing to the decline in oil prices. Combined speculative net length positions linked to ICE Brent and NYMEX WTI dropped to the lowest level since November 2020. The backwardation structure in all three markets weakened considerably in the second half of November.
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