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Saudi Arabia and its OPEC+ allies have engineered a prospective deficit in the oil market, lifting spot Brent prices by more than $15 a barrel since late April. The six-month Brent calendar spread has tightened from over $12 contango to under $3.
Analysts say the producer group has repeatedly forced deficits when it chose to cut output.
Deep, compliant output cuts are tightening the market and narrowing contango, which supports crude prices and feeds through to diesel and energy costs for feed mills and transport.
hydrocarbonprocessing.comMay 19, 2020After 656 past bullish geopolitics events, BRENT moved a median +1.9% over 5 sessions (63% higher; middle half -2.7% to +6.6%), and +0.7% over 20.
After 626 past bullish geopolitics events, WTI moved a median +2.1% over 5 sessions (62% higher; middle half -2.3% to +8.5%), and +1.6% over 20.
Moves of each commodity's benchmark from the last close before the event. Historical reads pool past events of the same kind; they describe what happened, not what will. Not investment advice.
