OPEC Monthly Oil Market Report, January 2022
Crude Oil Price Movements
Both crude oil spot and futures prices fell for the second-consecutive month in December. Major physical crude benchmarks decreased about 9%, m-o-m, on growing concerns that the rapid spread of the Omicron COVID-19 variant may have an impact on the global economy and oil demand. The OPEC Reference Basket fell $5.99, or 7.5%, to settle at a three-month low of $74.38/b. Crude oil futures prices extended losses in December, declining on both sides of the Atlantic, with the ICE Brent front month down $6.05, or 7.5%, to average $74.80/b and NYMEX WTI declining by $6.96, or 8.8%, to average $71.69/b. Consequently, the Brent/WTI futures spread widened 91¢ to average $3.11/b. The market structure of all three crude benchmarks – ICE Brent, NYMEX WTI and DME Oman – weakened in December, m-o-m. Hedge funds and other money managers extended sharp sell-offs in the first half of December, cutting combined futures and options net long positions related to ICE Brent and NYMEX WTI by about 30% between early November and mid-December.
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