Numbers Report – April 08, 2022
In the latest edition of the Numbers Report, we will take a look at some of the most interesting figures put out this week in the energy and metals sectors. Each week we’ll dig into some data and provide a bit of explanation on what drives the numbers.
Let’s take a look.
1. SPR Release Cools Down Historic Backwardation
- The collective release of 180 million barrels from the United States and IEA member countries has flattened oil futures’ forwards curve, easing fears of unprecedented tightness in the markets.
- The Biden Administration’s pledge to release 180 million barrels over the next six months exceeds the scope of IEA releases, however oddly enough one-third of the US SPR drawdown will be made under the aegis of the international organization.
- The prospect of a sizeable SPR volume hitting the markets also brought Middle East benchmarks Dubai, Oman and Murban some 70% down compared to their early-March peak.
- Backwardation in the Brent complex has eased to its lowest in three months, with the ICE Brent six-month spread now trending at $5 per barrel.
2. Ukraine War Exacerbates Risks of LNG Tightness
- Russia’s invasion of Ukraine will render gas market volatility much worse than it used to be, making gas shortages a much more immediate and realistic scenario, absent any demand shocks such as coronavirus lockdowns.
- Endowed with…