Crude oil fell around USD 5 to a 10-month low on Monday before returning to where it commenced the week.
The wild ride was prompted by a Wall Street Journal article that stated that OPEC+ is considering a rise in production of 500,000 barrels daily at their next week’s gathering. Saudi Arabia later denied the report, and this saw the price roar back toward opening levels.
Although Crude oil experienced wild price swings overnight, it has been relatively stable in Asia today, with the WTI futures contract above US$ 80 bbl while the Brent contract is approaching US$ 88 bbl. Gold managed to reach an uptick, trading above US$ 1,740.
Fractures began to appear in the oil market last Friday when the futures market dipped into contango for the first time since May 2021. Contango indicates underlying supply and demand dynamics within the oil market.
Both episodes of contango saw the market move back into backwardation to end the session on Friday and Monday.