OPEC Monthly Oil Market Report, September 2021
Crude Oil Price Movements: The OPEC Reference Basket (ORB) averaged $70.33/b in August, representing a decline of $3.20 m-o-m, or 4.4%. Year-to-date (y-t-d), ORB was $25.42, or 62.8%, higher, averaging $65.93/b. Crude oil futures prices on both sides of the Atlantic moved sharply lower in August, reaching their lowest levels since last May, as concerns about short-term Asian oil demand, mixed economic data, and the prospect of higher global oil supply triggered a sell-off. In August, the ICE Brent front-month declined $3.78 m-o-m, or 5.1%, to average $70.51/b, and NYMEX WTI fell $4.72 m-o-m, or 6.5%, to average $67.71/b. Consequently, the Brent/WTI front-month futures spread widened in August by 94¢ to average $2.80/b, its strongest since May. The market structure of all three major crude benchmarks – ICE Brent, NYMEX WTI, and DME Oman – remained in backwardation, however, their respective forward curves flattened on uncertainty about the oil demand outlook, lower seasonal crude demand in Asia, and the prospect of rising global oil supply. In August, hedge funds and other money managers extended the previous month’s sell-off, reducing their net long positions to the lowest since November 2020…
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