Crude oil prices continued to push fresh multi-month highs a week but costs started to pull back on Thursday as traders digested a report by the International Energy Agency (IEA) that revealed a lesser global consumption forecast for 2021. The IEA cut its consumption outlook by 200k barrels per day (bpd), with Covid and its economic impacts cited as the primary headwinds -- especially recent setbacks to Europe's vaccination efforts. However, WTI prices pushed more than 2% on Friday, taking back Thursday's losses and then some.

The IEA noted that demand will begin to outpace production later this season, helping to erode storage levels even as manufacturers pump out more oil to make the most of higher costs. OPEC released its monthly report shortly afterwards, projecting that the cartel will want to raises its output signal for 2021 by nearly two million additional barrels per day to satisfy the forecasted 27.5 million bpd outlook.bonus veren siteler Overall, the reports pointed to a still-fragile energy market that's highly susceptible to this plan of Covid-19.

WTI CRUDE OIL MARKET STRUCTURE

While outlooks in the IEA and OPEC bode well for longer-term oil prices, the recent price surge has might have surpassed market expectations and also a short-term pullback ought to help realign these forces. That said, next week can give way to a level of weakness. Any pullback may be short-lived -- out of big supply or demand shocks -- together with the present price structure in stocks reflecting a tightening supply outlook.

This occurs when spot prices are greater than further-dated contracts. The alternate scenario -- spot prices are lower compared to futures contracts -- is also known as contango. That said, backwardation indicates a near-term bullish market arrangement with tightening inventory levels. This will encourage refiners to tap deeper into storage as they ramp up production to make the most of higher - exemplified in the US oil landscape from the chart below. With that said, an increase in output farther down the road can make it tougher for energy costs to maintain competitive momentum.