The Dec’24 Brent futures contract weakened slightly this morning amid choppy price action, trading at $79.09/bbl at 07:00 BST and falling to $78.90/bbl at 11:20 BST (time of writing). We saw volatile price movement amid growing fears of a potential Israeli attack on Iran, countered by the continued efforts of US President Biden and the Gulf states to prevent further conflict. In the news, Iran’s Foreign Minister Abbas Araqchi stated today that Tehran will not hesitate to take “stronger defensive actions” in the event of an Israeli attack, as per Reuters. This statement followed Iran’s warning yesterday of a potential change in the country’s nuclear doctrine should Iranian oil facilities be targeted. In other news, BP stated that weak refining margins and weaker oil trading results are expected to put a dent in the UK-based oil major’s Q3 profit. In their oil production and operations segment, BP expects lower earnings by $100 million-$300 million. Finally, Mexico’s new Olmeca refinery, with a production capacity of 340kb/d, is currently running at 80%, according to President Sheinbaum. Meanwhile, Pemex’s most recent data from the end of August showed the refinery was running at a quarter of its capacity, or just over 84kb/d, according to Reuters. At the time of writing, the front month (Dec/Jan’25) and six-month (Dec/Jun’25) Brent futures spreads are at $0.55/bbl and $2.33/bbl, respectively.
