Key oil indicators are signaling looser balances ahead, after OPEC and its allies shocked the market with a dramatic early supply increase just as concerns over global demand become more acute.

Timespreads across the curve for global benchmark Brent were weaker, with the collapse more pronounced for longer-dated futures. The three-month spread, for instance, stood at $1.66 a barrel in backwardation — where crude for prompt delivery is more expensive than that further down the curve — on Friday at 8:33 a.m. London time, compared with over $2 earlier in the week.

The six-month spread was about $2.50 a barrel in backwardation, down from over $3 on Wednesday.

Thursday’s decision to lift output signals OPEC+’s “confidence in the market’s ability to absorb additional supply, though it introduces new complexities given persistent macroeconomic uncertainties, fluctuating demand signals and geopolitical risks,” said Mukesh Sahdev, an analyst with Rystad Energy.

The trend holds for contracts further out too, with the one-year spread and the December-December spread — both widely watched metrics when it comes to the state of long-term balances — also lower.

The collapse in timespreads comes as headline futures are also declining. Oil suffered the biggest slide since 2022 on Thursday, losing more than 6% after President Donald Trump imposed a cascade of tariffs, news swiftly followed by OPEC’s move.

The Middle Eastern crude benchmark, Dubai, also fell, according to Bloomberg Fair Value data, shedding about $5 on Thursday’s session with prices also trending lower on Friday.

--With assistance from Serene Cheong.

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