- Oil on track to end the week 7% lower, down for a seventh straight session and near multi-month lows
- Surging COVID-19 cases and ensuing lockdowns are to blame for dampening the outlook for oil product demand
- Commodities, in general, were also feeling downward pressure this week after the Fed said its considering reducing monthly stimulus that has caused the dollar to rally
- China has imposed new restrictions with its “zero tolerance” coronavirus policy (Bloomberg)
- New Zealand and Australia have also instituted new strict lockdown measures amid the rise in cases
- Oil time-spreads have continued to weaken as prices have relaxed
- Brent’s 12-month backwardation has fallen to -26c/Bbl to +$3.34/Bbl; the weakest since May 21
- Bank of America analysts said in an Aug. 19 report that the Brent curve is set to flatten
- “We are still set for a period of range-bound oil prices for the next six months, but we now see a flatter Brent crude oil term structure in into the winter, dragged down by distillates.”