Crude oil prices fell to levels not seen since the doldrums of the pandemic at the start of 2021, as a widely expected supply glut picked up momentum and peace talks in the Russia-Ukraine conflict took steps forward.<\/p>\n
Futures on international pricing benchmark Brent crude (BZ=F<\/a>) fell by 2.2% to trade below $59.30, while US benchmark West Texas Intermediate (WTI) crude (CL=F<\/a>) fell by a deeper 2.4% to trade below $55.50. Both energy products reached levels Tuesday morning that haven’t been seen since February 2021.<\/p>\n In signs of mounting downward pressure on the oil market, prices on Dubai crude oil, a key pricing benchmark in the Asia market, and barrels on the US Gulf Coast both slipped Tuesday morning into contango, according to Bloomberg data.<\/p>\n Contango is a market pattern where futures prices further out on the curve are higher than near-dated futures or spot prices as costs for storage, financing, and carry become steeper and traders look for a looser market to come.<\/p>\n Crack spreads, or the difference between oil and its derived products like jet fuel or gasoline, have also tightened over the past month as prices on the crude derivatives \u2014 which had been supporting overall pricing \u2014 have fallen.<\/p>\n Both Brent and WTI crude are headed for yearly losses of more than 20% as the market has been flooded with oversupply<\/a>. The OPEC+ cartel has been unwinding cuts at a significant rate, pumping up the amount of barrels it is adding to the market each month, at the same time as other supplier countries outside of the Americas have been raising their levels.<\/p>\n Commodities strategists at JPMorgan Chase (JPM<\/a>) and Goldman Sachs (GS<\/a>) see Brent prices slipping into the $50s per barrel in 2026,<\/a> reaching prices not seen since the start of the pandemic, when an overnight halt in cars on the road briefly pushed prices negative. If the OPEC+cartel, which has agreed to pause unwinding through the first quarter, doesn’t shift to cutting barrels and other producers don’t slow down as well, the strategists see oil possibly dropping into the $40s or even $30s per barrel \u2014 levels that would be catastrophic for the industry.<\/p>\n At the same time, peace talks in Ukraine seem to have moved forward, as Ukrainian leader Volodymyr Zelensky said he has secured a deal for US security guarantees in a bid to end the war. Russia’s Vladimir Putin, however, has not agreed to any concessions.<\/p>\n","protected":false},"excerpt":{"rendered":"Crude oil prices fell to levels not seen since the doldrums of the pandemic at the start of…\n","protected":false},"author":2,"featured_media":348979,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[45,49,48,46,29022,3098],"class_list":{"0":"post-349378","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-ca","10":"tag-canada","11":"tag-economy","12":"tag-labor-market","13":"tag-nasdaq-composite"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/349378","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=349378"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/349378\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/348979"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=349378"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=349378"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=349378"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}