energy.economictimes.indiatimes.com Open in urlscan Pro
2a02:26f0:3100:58f::3126  Public Scan

Form analysis
2 forms found in the DOM

GET https://energy.economictimes.indiatimes.com/search

<form method="get" class="top-panel__search--form" id="search_form" action="https://energy.economictimes.indiatimes.com/search">
  <input name="q" aria-label="Query" type="text" class="top-panel__search--input" autocomplete="off" placeholder="Search" value="">
</form>

#

<form action="#" class="top-newsletter-subs__form">
  <input type="text" id="subscribe_email_top" placeholder="Your Email" class="input-box top-newsletter-subs__input-box">
  <input id="subscriber_btn_top" type="button" value="Subscribe For Free" onclick="EtB2b.subscription.updateSubscription('top');" class="btn top-newsletter-subs__submit btn-variation">
</form>

Text Content

 * India
 * The Middle East and Africa


Login

Get App
 * 
 * News
    * Oil & Gas
    * Renewable
    * Economy
    * Coal
    * Companies
    * Power
    * Environment
   
   View all News
 * Leaders Speak
   
 * Events
   
 * Awards
   
 * Webinars
   
 * Brand Solutions
   
   
   INTEGRATED CAMPAIGNS
   
    * Customised Campaigns
    * Media Partnership
   
   
   BESPOKE EVENTS
   
    * Roundtables
    * Experiential Events
    * Roadshows
    * IP Events & Awards
   
   
   ADVERTORIAL
   
    * Immersive Advertorials
    * Customized Website Widget
    * Leader's Speak
    * Customised Newsletter
    * Website Section Sponsorship
   
   
   VIRTUAL ENGAGEMENT
   
    * Webinars
    * Virtual Conferences
    * Podcasts
    * Quiz
    * Hackathon
   
   
   VIDEOS
   
    * Leadership Interview
    * ETStudios
    * Video Profiling
    * Talk Show Series
    * Video Case Studies
   
   
   DIGITAL BRANDING & AWARENESS
   
    * Lead Generation
    * Mailer Promotions
    * Banner Promotions
    * Social Media Promotions
    * Reports
    * Survey
   
   
   FEATURED RECENT LAUNCHES
   
    * EVENT
      
      
      INDIA ENERGY WEEK
   
    * EVENT
      
      
      TRANSMISSION & DISTRIBUTION CONCLAVE 2024
   
    * EVENT
      
      
      PIL ANNUAL GAS FORUM 2025
   
    * EVENT
      
      
      GREEN YODHA
   
    * EVENT
      
      
      MAXIMIZE YOUR ASSET’S PERFORMANCE WITH HXGN EAM
   
    * EVENT
      
      
      PIL ANNUAL GAS FORUM 2024
   
    * EVENT
      
      
      GREEN TRANSITION SUMMIT 2024
   
    * EVENT
      
      
      ADVANCING ENVIRONMENTAL INNOVATIONS IN INDIA
   
    * EVENT
      
      
      RECOVERY FROM THE PANDEMIC
   
    * EVENT
      
      
      ENERGY TRANSITION SUMMIT
   
   
    * ENERGY SWITCH SUMMIT
   
    * LEAD GENERATION
      
      
      CLEAN ENERGY GROWTH
   
    * LEAD GENERATION
      
      
      3M ELECTRICAL SOLUTIONS
   
    * ROUND TABLE
      
      
      ESG LANDSCAPE
   
    * WEBINAR
      
      
      MAXIMIZE LEVERAGE ON ESG DATA
   
    * ROUND TABLE
      
      
      THE NEW ELECTRIC WORLD
   
   
    * LONGI SOLAR
   
   
    * POWER TALKS
   
   Explore More Get in Touch
 * More
   Newsletters MasterClasses About Us Contact Us Advertise With Us


Search

Renewables Oil & Gas Coal Economy Companies Power Podcast Energy TV More
Reports & DataInfographics
 * Integrated Campaigns
 * Bespoke Events
 * Advertorial
 * Virtual Engagement
 * Videos
 * Digital Branding & Awareness
 * More

 * More


WHATSAPP CHANNEL


TUNE IN TO KNOW THE LATEST UPDATES ON THE ENERGYMEA INDUSTRY


NEWSLETTERS


EXPLORE AND SUBSCRIBE TO OUR ETENERGYWORLD DAILY NEWSLETTERS


FOLLOW US


GET UPDATES OF EVENTS AND LATEST NEWS FROM ETENERGYWORLD ON LINKEDIN.

 * Oil & Gas
 * 4 min read


OIL TRADERS EXPECT STOCKS TO FALL SIGNIFICANTLY AFTER OPEC EXTENDS CUTS: KEMP

OECD commercial inventories of crude oil and refined products are estimated to
have been around 75 million barrels (-3% or -0.48 standard deviations) below the
prior ten-year seasonal average at the end of February.
 * 
 * 
 * 
 *  * Telegram
    * Facebook
    * Copy Link

 * 
 * 

 * 
 * 
 * 
 * 
 * 
 * 

 * Reuters

 * Updated On Mar 23, 2024 at 01:26 AM IST

Read by: 100 Industry Professionals
Read by 100 Industry Professionals
LONDON: Global petroleum inventories are only slightly below the long-term
seasonal average but futures prices have already moved into a steep
backwardation as traders anticipate they will deplete further over the rest of
2024.

OECD commercial inventories of crude oil and refined products are estimated to
have been around 75 million barrels (-3% or -0.48 standard deviations) below the
prior ten-year seasonal average at the end of February.

The U.S. Energy Information Administration's "Short-Term Energy Outlook" shows
the deficit has changed very little since March 2023 despite some fairly
significant swings in spot prices and calendar spreads.


Advt


Extra production cuts by Saudi Arabia and its OPEC⁺ allies have been offset by
faster-than-anticipated growth in non-OPEC output, mostly from the United
States, Canada, Brazil and Guyana.

Petroleum consumption has continued to increase steadily in line with its
long-term trend despite the prolonged slowdown in manufacturing and freight
activity across North America, Europe and China.

SPOT VERSUS SPREAD

Front-month futures prices for the benchmark Brent contract have averaged around
$84 per barrel so far in March, almost exactly in line with the long-term
average since the start of the century, once inflation is taken into account.



Average front-month prices have risen modestly from the recent low of $78 per
barrel in December, which was in the 43rd percentile for all months since 2000
in real terms.

Nearly all the price increases have been concentrated in the contracts nearest
to delivery, with little or no change in prices for deliveries in 2025 and
beyond.

Calendar average futures prices for Brent delivered in equal instalments over
the course of 2025 have averaged $76 so far in March up only slightly from $74
in December.

Chartbook: Global petroleum inventories and prices

The relative increase in nearby futures prices has pushed the market structure
into an increasingly steep backwardation.


Advt


Front-month prices have traded at an average premium of almost $4 over contracts
for delivery six months later so far in March (91st percentile).

The six-month calendar spread has strengthened significantly from an average of
just 42 cents per barrel (43rd percentile) in December.

PRODUCTION RESTRAINT

Such a steep backwardation would normally be associated with inventories that
are already low and rapidly depleting. The rapid move would also normally be
associated by a larger increase in spot prices.

In this instance, however, traders seem to be anticipating a much larger
depletion of inventories over the rest of the year rather than any current
tightness in the market.

Traders are reacting to signals that Saudi Arabia and its OPEC+ allies will
extend their cuts through the middle of year and beyond, even if consumption
remains robust and inventories draw down significantly.

Price rises mostly in nearby contracts imply the market is responding to the
anticipated restriction of production rather than upgrades in the outlook for
the economy and consumption.

Saudi Arabia and its closest allies have accepted a smaller share of global
production to support prices at a higher level and this calculation is expected
to be maintained for the indefinite future.

Production cuts will only be reversed "subject to market conditions", OPEC
announced on March 3, in other words when consumption is strong enough that
output can be increased without lowering prices.

REDUCING DOWNSIDE RISK

Saudi Arabia's willingness to extend its voluntary production restraint has
removed much of the downside risk from oil prices despite uncertainty about the
outlook for the global economy and interest rates.

By March 12, hedge funds and other money managers have boosted their net
position in futures and options linked to Brent and U.S. crude to the equivalent
of 379 million barrels (27th percentile for all weeks since records began in
2013).

The combined position is still fairly low, and could be characterised as
moderately bearish overall, but it is lot more positive than in the middle of
December, when it fell to a record low of just 128 million barrels.

Bullish long positions outnumbered bearish short ones by a ratio of 3.58:1 (36th
percentile) up from just 1.47:1 (a record low) on December 12.

Portfolio investors remain cautious about prices increasing further, at least
until there are clearer signs of a recovery in industrial activity, but are no
longer so fearful of them declining again.

One way or another, however, the current contradiction between average spot
prices and a strong backwardation will have to be resolved.

If global inventories deplete as much as the strong backwardation implies, spot
prices are likely to rise over the course of the year and very likely to exceed
$90.

But if the market remains comfortably supplied, as the current level of spot
prices implies, the backwardation will gradually ease.

Related columns:

- Record U.S. oil and gas production keeps prices under pressure (March 1, 2024)

- Western Hemisphere oil output surges, with a helping hand from OPEC (February
21, 2024)

- Oil consumption and prices revert to trend (January 12, 2024)



 * Reuters

   
 * Published On Mar 22, 2024 at 10:22 PM IST
   


 * 
 * 
 * 
 *  * Telegram
    * Facebook
    * Copy Link

 * 
 * 

Be the first one to comment.
Comment Now


COMMENTS


Comment Now Read Comment (1)


ALL COMMENTS

By commenting, you agree to the Prohibited Content Policy

Post

By commenting, you agree to the Prohibited Content Policy

Post


JOIN THE COMMUNITY OF 2M+ INDUSTRY PROFESSIONALS


SUBSCRIBE TO OUR NEWSLETTER TO GET LATEST INSIGHTS & ANALYSIS.





DOWNLOAD ETENERGYWORLD APP

 * Get Realtime updates
 * Save your favourite articles


Scan to download App
   
 * marguerita choy
 * versus spread front
 * oecd
 * europe
 * saudi arabia
 * opec







News

See whats happening in Energy sector right now

Exclusive

Read and get insights from specially curated unique stories from editorial

Leaders Speak

Business leaders sharing their insights

Events

Explore and discuss challenges & trends in India's leading B2B events

Awards

Recognise work that not only stood out but was also purposeful

Webinars

Join leaders & experts for roundtables, conferences, panels and discussions


JOIN THE COMMUNITY OF 2M+ INDUSTRY PROFESSIONALS

Subscribe to our Daily Newsletter



By continuing you agree to our Privacy Policy & Terms & Conditions

Advertise With Us

We have various options to advertise with us including Events, Advertorials,
Banners, Mailers, etc.

Get in Touch

Download ETEnergyworld App

Save your favourite articles with seamless reading experience



Get updates on your preferred social platform

Follow us for the latest news, insider access to events and more.



About Us

Contact Us

Newsletters

 * Guest-Post Guidelines
 * RSS Feed
 * Sitemap

 * RSS Feed
 * Sitemap
 * Guest-Post Guidelines


THE ECONOMIC TIMES BUSINESS VERTICALS

 * Auto
 * Retail
 * Health
 * Telecom
 * CIO
 * Real Estate
 * Marketing & Advertising
 * CFO
 * IT Security
 * BFSI
 * Government
 * Hospitality
 * HR
 * Legal
 * ET TravelWorld
 * Infra
 * B2B
 * CIOSEA
 * HRSEA
 * HREMEA
 * Education
 * EnergyWorldMEA
 * Manufacturing
 * Pharma

 * @2024 ETEnergyworld.com. All Right Reserved.
 * Privacy Policy
 * Terms and Conditions
 * Cookie Settings

 * Home
 * News
 * Oil & Gas
 * Oil traders expect stocks to fall significantly after OPEC extends cuts: Kemp