OPEC Monthly Oil Market Report, November 2021
Crude Oil Price Movements: Crude oil spot prices surged by more than 12% in October, on the back of soaring energy prices in Europe and Asia. Strong oil market fundamentals, compounded by expectations of higher oil demand in the winter months from “gas to oil switching”, have supported both spot and futures prices. The OPEC Reference Basket (ORB) increased $8.23 or 11.1%, m-o-m, in October to average $82.11/b. Year-to-date, the ORB averaged $68.33/b, for a gain of $27.77, or 68.4%, compared to the same period last year. In the futures market, the ICE Brent front-month contract rose $8.87 or 11.8%, m-o-m, to average $83.75/b in October, while NYMEX WTI increased $9.68 or 13.5%, m-o-m, to average $81.22/b. Consequently, the Brent/WTI spread narrowed by 81¢ to stand at $2.53/b in October. The market structure of all three major oil benchmarks – Brent, WTI and Dubai – strengthened, moving deeper into backwardation on further declines in OECD commercial oil stocks in September and the prospect of stronger near-term market fundamentals. Hedge funds and other money managers boosted bullish positions related to NYMEX WTI in October as data showed ongoing drawdowns in inventories at the Cushing, Oklahoma, trading hub. However, speculators cut bullish positions related to ICE Brent.
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