After a miserable summer, crude prices have come surging back as the ISIS militant group continues to make gains in the Middle East.
London-traded Brent was trading around $US103 Tuesday, near a two-week high and up 2% from recent lows. Until this week prices had come down as much as 12% from a June high.
Barclays has noted that those declines were masking run-ups at the long-end of the Brent contract’s futures curve.
“One of the most significant changes in oil market dynamics in recent months has been a rapid increase in far forward oil prices, with Dec-18 contracts trading at $US98/bl, compared with the $US86-95/bl range in which it has traded for the past three years,” they write in a note Tuesday. “In our view, the upward move in the Dec-2018 could prove sticky, as the oil market continues to reassess long-term oil market fundamentals in light of the deteriorating prospects of Iraq’s oil sector in the medium term.”
Here’s the chart:
New York-traded West Texas Intermediate was up nearly 1% Tuesday to $US94.20.
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