{"id":160582,"date":"2022-07-18T16:56:26","date_gmt":"2022-07-18T16:56:26","guid":{"rendered":"https:\/\/precoinnews.com\/?p=160582"},"modified":"2022-07-18T16:56:26","modified_gmt":"2022-07-18T16:56:26","slug":"oil-market-sees-support-from-physical-tightness","status":"publish","type":"post","link":"https:\/\/precoinnews.com\/markets\/oil-market-sees-support-from-physical-tightness\/","title":{"rendered":"Oil market sees support from physical tightness"},"content":{"rendered":"

LONDON\/NEW YORK (Reuters) – Benchmark oil prices have dropped by about $15 a barrel in the past 10 days as the threat of recession clouds the demand outlook, but the physical oil trade and the futures market structure tell a quite different story.<\/p>

FILE PHOTO: Oil pump jacks are seen at the Vaca Muerta shale oil and gas deposit in the Patagonian province of Neuquen, Argentina, January 21, 2019. REUTERS\/Agustin Marcarian<\/figcaption>

Growing concern about the economic outlook pushed Brent crude below $100 a barrel last week for the first time since April.<\/p>\n

But in the physical market, premiums have been at record levels. Nigerian Qua Iboe crude was offered at $11.50 a barrel above dated Brent this week, while North Sea grade Forties was bid at dated Brent plus $5.35 on Tuesday – both all-time highs.<\/p>\n

And while the outright Brent price has fallen almost 20% since May, the premium at which the nearby contract is trading to the second month – a structure known as backwardation, which implies tight prompt supply – has widened to $4.09 a barrel.<\/p>\n

That suggests strong underlying support for near-term prices despite the drop in the benchmark Brent contract.<\/p>\n

\u201cOutright prices and the structure are out of sync,\u201d said Tamas Varga of oil broker PVM. \u201cIt implies genuine strength on the physical front that goes against the sentiment in the futures market.\u201d<\/p>\n

Helping to keep supply tight, outages have reduced Libyan and Nigerian production, Western sanctions are forcing a re-routing of Russian oil flows, and OPEC and its allies have been unable to meet pledged output hikes.<\/p>\n

\u201cWhile a deep recession cannot be discounted, we remain focused on the objective fact of physically tight markets,\u201d BCA Research said in a note. That, it said, \u201cwill keep oil markets volatile and biased to the upside\u201d.<\/p>\n

In the United States, WTI-Midland and WTI at East Houston traded in June at a more than $3 premium to U.S. crude futures, the highest in more than 2 years.<\/p>\n

Though both grades have since edged off those highs, they are still trading more than 60% higher than at the start of June.<\/p>\n

U.S. crude stockpiles are at about 427.1 million barrels, about 2.4% lower than during the same time last year, Energy Information Administration data showed.<\/p>\n

But while market tightness is, in the words of one European trader, \u201cdefinitely what\u2019s being talked about\u201d, the risk of recession still looms large.<\/p>\n

The tightness, says Varga, \u201ccould also mean further upside potential; however, stubbornly high global inflation and its impact on oil demand might just change the \u2018buy-the-dips\u2019 attitude to \u2018sell-the-rallies\u2019.\u201d<\/p>\n

Source: Read Full Article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

LONDON\/NEW YORK (Reuters) – Benchmark oil prices<\/p>\n","protected":false},"author":3,"featured_media":160581,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23054],"tags":[],"yoast_head":"\nOil market sees support from physical tightness - Pre Coin News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/precoinnews.com\/markets\/oil-market-sees-support-from-physical-tightness\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Oil market sees support from physical tightness - Pre Coin News\" \/>\n<meta property=\"og:description\" content=\"LONDON\/NEW YORK (Reuters) – Benchmark oil prices\" \/>\n<meta property=\"og:url\" content=\"https:\/\/precoinnews.com\/markets\/oil-market-sees-support-from-physical-tightness\/\" \/>\n<meta property=\"og:site_name\" content=\"Pre Coin News\" \/>\n<meta property=\"article:published_time\" content=\"2022-07-18T16:56:26+00:00\" \/>\n<meta name=\"author\" content=\"mediabest\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:image\" content=\"https:\/\/precoinnews.com\/wp-content\/uploads\/2022\/07\/Oil-market-sees-support-from-physical-tightness.jpg\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"mediabest\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/precoinnews.com\/markets\/oil-market-sees-support-from-physical-tightness\/\",\"url\":\"https:\/\/precoinnews.com\/markets\/oil-market-sees-support-from-physical-tightness\/\",\"name\":\"Oil market sees support from physical tightness - Pre Coin News\",\"isPartOf\":{\"@id\":\"https:\/\/precoinnews.com\/#website\"},\"datePublished\":\"2022-07-18T16:56:26+00:00\",\"dateModified\":\"2022-07-18T16:56:26+00:00\",\"author\":{\"@id\":\"https:\/\/precoinnews.com\/#\/schema\/person\/ad0e9920e03d3b41c7ad02a18375d76a\"},\"breadcrumb\":{\"@id\":\"https:\/\/precoinnews.com\/markets\/oil-market-sees-support-from-physical-tightness\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/precoinnews.com\/markets\/oil-market-sees-support-from-physical-tightness\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/precoinnews.com\/markets\/oil-market-sees-support-from-physical-tightness\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/precoinnews.com\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Markets\",\"item\":\"https:\/\/precoinnews.com\/category\/markets\/\"},{\"@type\":\"ListItem\",\"position\":3,\"name\":\"Oil market sees support from physical tightness\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/precoinnews.com\/#website\",\"url\":\"https:\/\/precoinnews.com\/\",\"name\":\"Pre Coin News\",\"description\":\"precoinnews.com\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/precoinnews.com\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/precoinnews.com\/#\/schema\/person\/ad0e9920e03d3b41c7ad02a18375d76a\",\"name\":\"mediabest\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/precoinnews.com\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/f5f13cb3b94fc348d515c0951f6ca073?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/f5f13cb3b94fc348d515c0951f6ca073?s=96&d=mm&r=g\",\"caption\":\"mediabest\"}}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Oil market sees support from physical tightness - Pre Coin News","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/precoinnews.com\/markets\/oil-market-sees-support-from-physical-tightness\/","og_locale":"en_US","og_type":"article","og_title":"Oil market sees support from physical tightness - Pre Coin News","og_description":"LONDON\/NEW YORK (Reuters) – Benchmark oil prices","og_url":"https:\/\/precoinnews.com\/markets\/oil-market-sees-support-from-physical-tightness\/","og_site_name":"Pre Coin News","article_published_time":"2022-07-18T16:56:26+00:00","author":"mediabest","twitter_card":"summary_large_image","twitter_image":"https:\/\/precoinnews.com\/wp-content\/uploads\/2022\/07\/Oil-market-sees-support-from-physical-tightness.jpg","twitter_misc":{"Written by":"mediabest","Est. reading time":"2 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/precoinnews.com\/markets\/oil-market-sees-support-from-physical-tightness\/","url":"https:\/\/precoinnews.com\/markets\/oil-market-sees-support-from-physical-tightness\/","name":"Oil market sees support from physical tightness - Pre Coin News","isPartOf":{"@id":"https:\/\/precoinnews.com\/#website"},"datePublished":"2022-07-18T16:56:26+00:00","dateModified":"2022-07-18T16:56:26+00:00","author":{"@id":"https:\/\/precoinnews.com\/#\/schema\/person\/ad0e9920e03d3b41c7ad02a18375d76a"},"breadcrumb":{"@id":"https:\/\/precoinnews.com\/markets\/oil-market-sees-support-from-physical-tightness\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/precoinnews.com\/markets\/oil-market-sees-support-from-physical-tightness\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/precoinnews.com\/markets\/oil-market-sees-support-from-physical-tightness\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/precoinnews.com\/"},{"@type":"ListItem","position":2,"name":"Markets","item":"https:\/\/precoinnews.com\/category\/markets\/"},{"@type":"ListItem","position":3,"name":"Oil market sees support from physical tightness"}]},{"@type":"WebSite","@id":"https:\/\/precoinnews.com\/#website","url":"https:\/\/precoinnews.com\/","name":"Pre Coin News","description":"precoinnews.com","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/precoinnews.com\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/precoinnews.com\/#\/schema\/person\/ad0e9920e03d3b41c7ad02a18375d76a","name":"mediabest","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/precoinnews.com\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/f5f13cb3b94fc348d515c0951f6ca073?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/f5f13cb3b94fc348d515c0951f6ca073?s=96&d=mm&r=g","caption":"mediabest"}}]}},"_links":{"self":[{"href":"https:\/\/precoinnews.com\/wp-json\/wp\/v2\/posts\/160582"}],"collection":[{"href":"https:\/\/precoinnews.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/precoinnews.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/precoinnews.com\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/precoinnews.com\/wp-json\/wp\/v2\/comments?post=160582"}],"version-history":[{"count":0,"href":"https:\/\/precoinnews.com\/wp-json\/wp\/v2\/posts\/160582\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/precoinnews.com\/wp-json\/wp\/v2\/media\/160581"}],"wp:attachment":[{"href":"https:\/\/precoinnews.com\/wp-json\/wp\/v2\/media?parent=160582"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/precoinnews.com\/wp-json\/wp\/v2\/categories?post=160582"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/precoinnews.com\/wp-json\/wp\/v2\/tags?post=160582"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}