Crude futures and time spreads continue to pull back slightly with suggestions a further increase in Iranian oil production next year adding to the earlier soft prices. Iran’s oil production is estimated to reach 4mbpd next year following 3.6mbpd in March according to Iran’s Oil Minister, Javad Oji.

• Crude was already drifting down following a rally in recent days as the market assesses the future balance from risks of weaker demand growth and the uncertain OPEC+ production plans ahead of the group meeting this weekend.
• Both near term and longer term crude options are holding onto the bearish skew after seeing puts strengthen in early Nov. The CME OPEC Watch Tool based on WTI options prices suggests a 53% chance of deeper OPEC cuts and a 40% chance on maintaining existing levels according to Bloomberg.
• The Brent second month 25 delta call-put skew has steadied in the last week after falling to the most bearish since May on Nov 16. The spread is today around -5.0% while the WTI skew is at -4.9%.
• The longer term Dec24 crude option call-put skews are edging lower with Brent down to -6.3% after closing in to -5.9% last week while the WTI spread is at -6.6%.
  • Brent JAN 24 down -0.5% at 81.88$/bbl
  • WTI JAN 24 down -0.6% at 77.4$/bbl
  • Brent JAN 24-FEB 24 down -0.06$/bbl at -0.08$/bbl
  • Brent JUN 24-DEC 24 down -0.09$/bbl at 1.92$/bbl
  • WTI JAN 24-FEB 24 down -0.04$/bbl at -0.11$/bbl
  • WTI DEC 23-DEC 24 up 0.24$/bbl at 2.55$/bbl