Crude Benchmarks Decline Month-on-Month as Market Structure Stays Tight

In Numbers

●     OPEC Reference Basket: $61.74 per barrel, down $2.72 from November

●     Brent crude: $61.63/b, down $2.03 Month Over Month

●     WTI crude: $57.87/b, down $1.61 m-o-m; Brent–WTI gap narrowed to $3.76/b

What Changed

Oil prices fell across major benchmarks in December. The decline was broad, affecting OPEC’s reference basket, Brent and WTI alike. The price gap between Brent and WTI narrowed as US crude held slightly firmer. Futures markets remained in backwardation, meaning oil for immediate delivery still costs more than oil for later delivery, a sign that near-term supply and demand are relatively tight despite weaker financial market sentiment.

Why It Matters (Global Oil Market)

Lower benchmark prices reflect softer market mood, but the continued backwardation shows that physical supply has not loosened dramatically. In simple terms, traders are cautious, yet the oil needed right now still carries a premium. This balance limits the risk of a sharp price collapse while keeping markets sensitive to supply disruptions or demand surprises.

Why Africa Should Care

For African oil importers, lower crude prices can reduce fuel import bills and ease currency pressure. For oil exporters, however, weaker benchmarks translate into lower per-barrel revenue, affecting government budgets tied to oil income. The still-tight near-term market supports ongoing demand for prompt crude exports, but price volatility remains a key fiscal risk.