- Oil prices were down over 1% Tuesday morning as the IEA said the global market has returned to surplus
- The Paris-based agency lowered its 1Q demand forecast by 600 MBbl/d
- The IEA cited rebounding supplies from numerous producers are creating a new oversupply, which is likely to swell further early next year (BBG)
- The oil curve reflects the reality of looser balances
- The spread between Brent’s two nearest contracts narrowed to 11c/Bbl on Tuesday compared with over $1 a month earlier, indicating a softening physical supply and demand balance
- Backwardation in the prompt timespread was the smallest since May
- “The first quarter of 2022 will clearly be challenging for oil,” said Bjarne Schieldrop, chief commodities analyst at SEB AB (BBG)