The Brent futures contract has been strengthening throughout the day to surpass the $76/bbl mark and is trading at $76.99/bbl at 17:00 GMT (time of writing). WTI also strengthened strongly above the $70/bbl mark and is now comfortably sitting at $72.06/bbl at 17:00 GMT. Prices have strengthened amid a weaker dollar as the Fed announced potential rate cuts in 2024, the former dropping to four-month lows against the Japanese Yen today due to the announcement. Stronger fundamentals announced by the EIA also drove the upward trend in crude with stocks seeing a larger draw than expected.
The COP28 compromise has referenced fossil fuels for the first time in three decades. However, the agreement does not recommend any “phasing out” of fossil fuels but rather “calls on parties” to take action and transition away in an “orderly and equitable manner”. On Thursday, the IEA announced oil demand would grow by 1.1mbdp in 2024, up from its previous forecast of 0.93mbpd.
The front and 6-month Brent futures spreads are at -$0.25/bbl and -$0.64/bbl respectively.
