OPEC Monthly Oil Market Report, October 2020
Crude Oil Price Movements
The OPEC Reference Basket (ORB) fell by $1.46, or 3.5%, month-on-month (m-o-m), to average $40.08/b in October. Year-to-date (y-t-d), the ORB averaged $40.57/b, or $23.34 lower than the same period last year. Crude oil futures prices extended losses, with oil market sentiment continuing to be dominated by concerns about the recovery in global oil demand, amid a sharp increase in the number of daily COVID-19 cases in several regions. Crude oil futures prices on both sides of the Atlantic settled lower in October. ICE Brent was down 35¢/b, m-o-m, to stand at $41.52/b, while NYMEX WTI edged 7¢ lower to settle at $39.55/b, keeping the Brent-WTI spread narrow at just below $2/b. In terms of market structure, NYMEX WTI, ICE Brent and DME Oman were in sustained contango during October. Hedge funds and money managers in WTI slightly reduced their net long positions during the month, while in ICE Brent there was a slight increase in net long positions, albeit remaining at low levels, given the high uncertainty surrounding market outlooks.
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