The Oct’24 Brent futures contract strengthened to $82/bbl at 09:20 BST today. Following this surge, price action turned choppier, enabling the futures flat price to briefly oscillate around $81.85-82/bbl. However, the contract ultimately broke out of this range to trade at $82.15/bbl as of 11:10 BST (time of writing). The market appears to be supported by factors such as a possible escalation of the conflict in the Middle East, with the US preparing for “what could be a significant set of attacks”, as per White House national security spokesperson John Kirby. The market will also likely be awaiting Tuesday’s US PPI data and Wednesday’s CPI data for further directional clarity. The IEA has left its global oil demand growth forecast unchanged at 970kb/d for 2024 but has trimmed its 2025 forecast by 30kb/d to 950kb/d amid softening Chinese consumption. In other macro news, the UK’s pay growth slowed down to +5.4% y/y in Q2’24, its slowest pace in nearly two years, signalling a likely easing of inflationary pressures. On the other hand, Japan’s corporate goods price index rose 3% y/y in July, its fastest y/y growth in 11 months (prev: 2.9% y/y). Finally, at the time of writing, the Oct/Nov’24 and Oct/Apr’25 Brent futures spreads stood at $0.95/bbl and $3.30/bbl, respectively.
