Global Oil Data Deck (December ‘23)

Market balances loosened notably in October on flat supply and a seasonal pullback in demand, mirroring plunging crude prices and weakening futures curve structure.

This 60-page December 2023 edition of my monthly data-dense and visualization-heavy Global Oil Data Deck series (attached PDF below) is exclusive to paid Commodity Context subscribers.

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Overview

• Global oil market balances loosened notably in October but not enough to completely erase the projected undersupply; global supply remained flat while a fall in previously-exceptional Chinese demand exacerbated a seasonal pullback in global demand.

• Prices have been under intense pressure heading into the end of the year, with contracts recovering from a low of $72/bbl over the past week to be down just slightly on the month (<$80/bbl Brent).

• While price weakness has been, no doubt, rooted in looser market conditions, the declines have been accelerated and accentuated by speculative participants; the net speculative position in major crude contracts has fallen to its lowest since the COVID-related selloff in 2020.

• Both the WTI and Brent futures curves are in mild prompt contango; however, the higher prevailing interest rate environment acts to soften the oversupply signal—compared to the same contango in, say, 2014—given the increased financing costs of inventory carry.

[Full PDF and further analysis below]