Brent crude oil approaches $ 85, WTI crude oil at $ 82 - real demand enters the market
The price of crude oil rose sharply today, extending recent gains. This may be partly the result of the latest information from other energy markets - floods in China are holding back coal mining, which is causing prices to rise sharply. In turn, Gazprom increased its 2021 price guidance for natural gas exports, while signaling caution on volumes it could ship, as Europe's energy crisis worsens. At the same time pointing to rising prices in the coming months.
Saudi Aramco points out that oil demand has increased by 0.5 million bpd due to the shift from gas to oil. SEB, in turn, draws attention to the real demand in the market, which is illustrated by a clear shift in the futures curve. The difference between subsequent contacts is close to USD 1, while the difference between contacts current and next year is over USD 8 per barrel! SEB emphasizes that refining margins encourage producers to increase fuel production. At the same time, we can observe some signs of revival from the supply side. Production in Kazakhstan is bouncing back, while Iran proposes deliveries in "any quantity" in exchange for goods or investments in the country.
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The 12-month spread currently stands $ 8 a barrel, which shows an increase in short-term demand. Source: Bloomberg
Brent crude oil is approaching $ 85 per barrel and local highs from October 2018. Another important resistance lies around $90 per barrel where lows from June 2012 are located. Source: xStation5
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