With OPEC extending production cuts, oil traders are anticipating a significant decrease in global petroleum inventories for the remainder of 2024. Despite inventories hovering close to the long-term seasonal average, futures prices have shifted into a steep backwardation, reflecting expectations of further depletion. Additional production cuts by key players like Saudi Arabia and its OPEC⁺ allies have been counteracted by robust output growth from non-OPEC countries. The market dynamics, including rising front-month futures prices and strengthening backwardation, indicate a tightening supply-demand balance in the oil market.
Oil Traders Brace for Inventory Decline as OPEC Extends Production Cuts