Brent forward curve and falling US inventories point to a tight oil market

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Oil News

Brent,WTI,Commodities

The Brent oil price initially fell to a monthly low of USD 83.5 per barrel this week as a result of the weak Chinese data.

However, the price subsequently recovered, Commerzbank’s commodity strategist Carsten Fritsch notes. A tight oil market is coming The time spreads of the Brent forward curve widened over the course of the week. A significant price premium must therefore be paid for oil available at short notice, which indicates a tight oil market. This was also partially confirmed by the weekly inventory data from the American Petroleum Institute and the US Department of Energy.

This was the third consecutive weekly decline. The API had reported a decline in crude oil stocks of 4.4 million barrels the day before. However, gasoline and middle distillates saw a surprising stock build of 3.3 million and 3.5 million barrels respectively. Net crude oil imports rose slightly compared to the previous week, while crude oil processing fell slightly but remained at a high level of just under 17 million barrels per day.

 

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