Slides - IEA
Slides - IEA
Slides - IEA
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Oil Prices Track Worsening Economic Crisis<br />
Fall In Line with Broader Financial Market Downturn<br />
US$/bbl<br />
120<br />
110<br />
100<br />
90<br />
80<br />
70<br />
NYMEX WTI vs S&P 500<br />
60<br />
Jan 10 Jul 10 Jan 11 Jul 11 Jan 12<br />
NYMEX WTI<br />
S&P 500 (RHS)<br />
Index<br />
1500<br />
1400<br />
1300<br />
1200<br />
1100<br />
Source: NYMEX<br />
-6<br />
1000<br />
$/bbl<br />
12<br />
10<br />
8<br />
6<br />
4<br />
2<br />
0<br />
-2<br />
-4<br />
Backwardation<br />
Crude Futures<br />
Forward Spreads<br />
May 11 Aug 11 Nov 11 Feb 12 May 12<br />
WTI M1-M12<br />
Source: ICE, NYMEX<br />
Contango<br />
Brent M1-M12<br />
• Resurgent worries over the euro zone crisis also saw oil prices<br />
more closely track the broader financial markets<br />
• Acute sovereign debt issues heightened risk aversion in global<br />
commodity markets and triggered a massive liquidation by investors in<br />
net-long oil futures contracts<br />
• Increased crude supplies in Europe, especially from Libya, Iraq<br />
and Saudi Arabia, add downward pressure on the front end of<br />
the forward curve for Brent<br />
• Brent M1-M12 backwardation narrowed sharply, to around<br />
$2.50/bbl in early June compared with $4.54/bbl in May<br />
© OECD/<strong>IEA</strong> - 2012<br />
Source: <strong>IEA</strong> Oil Market Report<br />
15
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