The change will take effect November 8, 2021 for the February 2022 contract month, pending regulatory review.
Deloitte analysts find that while peak growth has passed, the industry will remain on solid ground for the foreseeable future. But how companies choose their competitive positioning will determine the new energy order.
Crude stocks at the Cushing, Oklahoma, delivery hub fell by 2.3 million barrels to 31.2 million barrels. That’s the lowest level since October 2018, and points to tightness in the market that may take some time to alleviate.
While the news about COVID-19 and supply/demand fundamentals remain favorable, Stratas Advisors says they see other factors that will moderate oil prices.
Carsten Fritsch, analyst at Commerzbank, said the surge in oil prices was due to a tight market, as shown by the 12-month forward curve and the premium at which the first-month futures contract is trading to the second.
Spare capacity is an important cushion for the oil market as it allows producers to quickly respond to unplanned outages that could tighten the market and cause big fluctuations in prices.
OPEC and allies led by Russia, collectively known as OPEC+, have done a “remarkable” job acting as “so-called regulator of the oil market,” says Saudi Arabia energy minister Prince Abdulaziz bin Salman.
Oil and natural gas prices have soared to multiyear highs recently, sending power prices surging to record levels as widespread energy shortages engulf Asia and Europe.
Natural gas prices at record highs could provide a potential headwind to oil demand growth, OPEC said.
The International Monetary Fund cut its growth outlooks for U.S. and other major economies amid supply chain disruptions and cost pressures.