Page 5 - Policy Economic Report - November 2024

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

reserve position in the International Monetary Fund (IMF) contracted by $51 million, now standing at $4.2
billion.

As far as oil and gas industry is concerned, global oil prices have eased from early-October highs, as market
attention once again shifted from supply risks to concerns over the health of the global economy, sluggish
oil demand and ample supply. After surging past $80/bbl at the start of October, Brent crude oil futures
fell to around $72/bbl by mid-November as fears of an attack by Israel on Iran’s energy infrastructure
faded.

Hedge funds and other money managers maintained bearish stances on oil prices with mixed movements
in their positions. In the first week of October, speculators covered a significant volume of short positions
and increased their exposure. Sentiment then shifted and speculators reduced net long positions for three
following weeks. Between the weeks of 8 October and 29 October, money managers sold an equivalent
of 113 mb, leading to a 37.2% drop in combined futures and options net long positions in ICE Brent and
NYMEX WTI.

The premium of light sweet crude over medium sour crude continued to show mixed movement among
regions in October, following the same trends observed in the previous month. In Europe and Asia, sweet
sour crude differentials narrowed further as the value of light sweet crude came under pressure due to
the high availability of prompt loading barrels in the Atlantic Basin, and amid the peak of refinery
maintenance season. Meanwhile, stronger fuel oil margins lent support to medium and heavy sour grades.
In contrast, in the US Gulf Coast (USGC), the sweet-sour crude spread widened slightly in October as sour
crude remained under pressure.

Natural gas spot prices at the US Henry Hub benchmark averaged $2.2 per million British thermal units
(MMBtu) in October 2024. Concerns about supply disruptions ebbed as production continued to return
to normalcy in October, following several outages caused by the hurricane season in the Gulf of Mexico
during the two previous months. According to data from the US Energy Information Administration (EIA),
underground storage rose in October by 8.0%, m-o-m. Prices were further pressured by US LNG export
delays, which inflated domestic supplies. Henry Hub prices were down by ~26%, y-o-y.

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