OPEC Monthly Oil Market Report, February 2022

Crude Oil Price Movements: Crude oil spot prices rebounded in January, compared to the previous month, as oil futures markets surged. Crude prices were supported by strong global oil market fundamentals amid dissipating fears about the impact of the COVID-19 Omicron variant and geopolitical risks, which raised concerns about near-term oil supply. The OPEC Reference Basket increased $11.03, or 14.8%, to settle at $85.41/b in January, its highest monthly value since September 2014. Similarly, crude oil futures prices increased on both sides of the Atlantic with the ICE Brent front month up $10.77, or 14.4%, in January to average $85.57/b and NYMEX WTI rising by $11.29, or 15.7%, to average $82.98/b. As a result, the Brent/WTI futures spread narrowed by 52¢ to an average of $2.59/b. The market structure of all three crude benchmarks – ICE Brent, NYMEX WTI and DME Oman – strengthened significantly in January over the previous month as market perception of the outlook for the supply-demand balance improved. Hedge funds and other money managers turned more positive about oil prices, increasing net long positions to their highest level since last November.

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