Front month Brent prices have increased by 34% over the last 3 months, hitting 95 $/bbl for the first time since the Russia-Ukraine war induced rally of summer 2022. Significant OPEC+ supply cuts (recently extended to the end of the year), alongside stubbornly sticky demand have tightened the market, leading to stocks at Cushing dropping close to the operational minimum.
The Brent move has significant impacts outside of the oil sphere, with shifts in gas vs crude pricing one of the key drivers of LNG portfolio value, as we analysed a few weeks back. Gas to oil slopes in Cal 2024 are hovering around oil parity of 17.2%, down from front month slopes in 2022 of close to 100%. The development of crude prices against gas prices going forward will be a key area of focus for LNG & gas portfolio owners.
