The coronovirus pandemic ravaged oil demand as economies around the world had to shut down for extended periods of time to curb the spread of the virus.

But the oil market is on a bull run, despite renewed lockdowns in Europe and Asia to curb second and third waves of the virus.

A look at Brent crude time spreads also paints a picture of a tight market.

The six-month Brent spread reached about $2.4 a barrel backwardation on Friday, its widest in a year. Backwardation is when prices on the prompt trade at a premium to future prices, and usually encourages traders to take oil out of storage, signalling a stronger market.

OPEC+ has made it clear that it intends to rein in bloated oil inventory levels that the pandemic brought about.

The group's base-case scenario shows that the oil market will be in a deficit throughout 2021, with inventories in the industrialised world expected to fall below the 2016-2020 average in the second half of the year.

Strong compliance with agreed oil cuts by OPEC+ have also helped support prices, although some countries participating in the cuts are yet to make good on compensating for their overproduction.

In December, cumulative overproduction hit 2.69 million barrels per day, OPEC+ data shows, compared with 2.46 million bpd in November, with the increase coming largely from higher production from non-OPEC members Russia, Kazakhstan and South Sudan.


Brent Crude Prices


Brent Time Spreads


World Oil Demand and Supply


OECD Oil Stocks OECD Oil Stocks


Oil Market Balance - OPEC+ base case scenario


OPEC+ Compliance with Production Cuts (%)


OPEC Cumulative Overproduction


Non-OPEC Cumulative Overproduction


Cumulative OPEC+ Overproduction


OPEC+ Overproduction Compensation Plans


OPEC+ Compliance with Production Cuts (%)https://tmsnrt.rs/3pMTkpC


Cumulative OPEC+ Overproductionhttps://tmsnrt.rs/2YJaZmf


Brent Crude Priceshttps://tmsnrt.rs/2N1YZtG


Brent Time Spreadshttps://tmsnrt.rs/3rlm5Kz

(Reporting by Ahmad Ghaddar; Editing by Susan Fenton)

By Ahmad Ghaddar