Long TA Arb at 12c/gal APIs were quite bullish, showing a 2.8M draw. If today’s EIA statistics are close to these figures, we should expect a bullish movement on RBOB. Additionally, the EBOB front has been sticky due to the
Long Aug/Sep 3.5 Barges Since the start of July, Barge spreads have come off, it seems that it has found support at $5/mt levels as it has struggled to break past, we have also seen recent strength in the Barge
The Onyx Futures COT Report seeks to aggregate ICE and CFTC data and present it in a simple format that is digestible and beneficial to all participants in the oil derivatives space.
Short Sep Sing 0.5% Crack With more low sulphur fuel oil cargoes arriving from the West to add to existing stockpiles, we expect LSFO to come under pressure. There has been sluggish demand in the world’s largest bunkering hub of
Long Aug/Oct 3.5% Barge Over the last couple of days, we have seen Aug/Oct fall from $19.50 to $13.50. We’re seeing a shift in sentiment this morning at barge cracks, and spreads are being well-bid with little sell side interest
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The Onyx Futures COT Report seeks to aggregate ICE and CFTC data and present it in a simple format that is digestible and beneficial to all participants in the oil derivatives space.
With European VLSFO in backwardation in the prompt months, physical traders will note that the arb is open and we should see VLSFO from Europe start to flow to Asia.
Long Aug/Sep 380 China’s average daily oil refining throughput slowed in June, a third month of declines, after more domestic plants shut their operations for maintenance. The Asian nation processed 58.32 million tons of crude last month, 4.3% lower than
Long Aug TA Arb @ 9.90c/gal After the recent sell off in the front TA Arb we have started to see some support at these levels and expect buyside interest to enter the market.
TARGET: $86.00/bbl – $88.00/bbl PRICE: $86.10/bbl Party in the USA? Brent appears confident to break a four-time streak of ending the week stronger than where it began, amid a fall from last week’s rally to a four-month high. Despite this,
SHORT SEP 3.5 BRG CRK Temperatures in Europe have been well above seasonal norms and there’s little sign of that changing anytime soon. Looking further into the future, Sweden’s largest refiner says climate change is making fuel production harder. Temperatures
LONG AUG VISCO Visco have been weakened lately by poor physical demand and trade house selling. It has seen some recovery this week with better demand for 180, as cooling demand has increased due to hot weather in the Middle
This week Research Analyst Mita Chaturvedi brings you trades in Asian High Sulfur Fuel Oil and Northwestern European propane. Firstly, we take a short-positioned view of Singapore 380 fuel oil spreads. Singapore’s commercial stockpiles of heavy distillates have increased 1.6%
Long Aug/Sep 380 spread : Our trade idea is to long Aug/Sep 380 spread. Hot weather in the Middle East and Persian Gulf were expected to maintain power generator. End-consumers look to cool their houses and buildings. We believe demand for
Onyx Research Analyst Mita Chaturvedi reports this week’s Brent forecast.
Long Sep/Oct 3.5 Barges : Our trade idea is to long Sep/Oct 3.5 Barges. Since 1st of July we have seen bullish movements with 3.5 Barge spreads, trading from $8/mt up to now currently trading at $11/mt. We believe spreads will
Long Aug 3.5 Barge crack: Our trade idea is to long Aug 3.5 Barge crack – recently we have seen weakness with the barge crack, trading down from -$7.60/bbl to -$8.90/bbl. However there has been a slight retracement back up
Long Aug/Sep 380: Our trade idea is to long Aug/Sep 380. We have seen continuous rally of Aug/Sep 380 spread since 1st of July. We believe there is still bullish momentum pushing the spreads up higher. For brokerage services across
Long Aug 380 EW: Barge cracks are under pressure due to continued deferred barge crack selling. We think aug 380 EW will be supported on the back of this. For brokerage services across the barrel and to receive our weekly
We have seen Aug 380 crack has been trading between trading between -$6.65/bbl and -$5.85/bbl since 21st June, showing no real directional movement. Aug 380 crack is trading at a technical support level alongside RSI heading towards oversold territory, we
TARGET PRICE: $83/bbl – $85/bbl PRICE: $85.80/bbl Return of the pre-weekend bulls? On Monday, we forecast short-term bearishness to take the benchmark Brent crude futures to $83-85/bbl by the end of this week. We now see the September futures contract
Short July 0.5 Sing crack Recently, the crack showed significant strength, trading up to $11.45/bbl due to concerns about potential supply issues following a fire at the Dangote refinery. However, Bloomberg reported that the incident was minor and the refinery
In this white paper, Onyx’s team explores the effectiveness of the CFTC COT Report in analysisng market positioning in the oil derivatives complex. Analysis suggests that for an up to date, expansive interpretation of current trader positioning for the whole
Short July 92/MOPJ 92 has been struggling to keep up with the recent strength in RBOB and there is still a firm bullish trend in naphtha. We think this will continue into the end of the month so we expect
Long Q3 EBOB Crack After initial weakness this morning hanging over from yesterday, we think it’s a good opportunity to try and fade that weakness and take an opposing position. For brokerage services across the barrel and to receive our
In ‘The Officials’, Onyx Capital Advisory publishes outright values, spreads, cracks and boxes for the main energy commodities traded in the marketplace. The published values are determined independently and on a fair market basis by our team of dedicated professionals.
Technical fluff that has propped up Brent, thanks to a certain pair of hot hands in the North Sea, will likely
prove unsustainable.
Too close to the sun? The prompt Brent futures flat price contract recorded great strength last week. The contract began the week at $84.25/bbl and rallied past the $86/bbl handle on 21 June – where it met resistance. We now see the contract hovering around $85.30/bbl at 08:30 BST (time of writing), although we anticipate short-term bearishness to take the benchmark crude futures to $83-85/bbl by Friday. This expectation emerges out of three key factors:
Short July Arb At these levels we anticipate some physical sell side interest on the front arb, with arb opportunities becoming more favourable. For brokerage services across the barrel and to receive our weekly trade ideas: insight@onyxcapitaladvisory.com
In Asia, the Dubai players were at it again vigorously, with Petrochina playing a less prominent role while
Exxon came out swinging.
TARGET PRICE: $82/bbl – $84/bbl PRICE: $85/bbl Is Summer Demand Finally Here? The crude oil futures market is on track for its second consecutive weekly gain on signs of better demand as Brent futures rallied to seven-week highs. We initially
In ‘The Officials’, Onyx Capital Advisory publishes outright values, spreads, cracks and boxes for the main energy commodities traded in the marketplace. The published values are determined independently and on a fair market basis by our team of dedicated professionals.
From East to West, from trading companies to majors, from Dubai to Brent, the rival BFFs are letting loose their cannonades on one another.
Short July 0.5% Sing Crack With cargos of LSFO arriving from Dangote refinery in Nigeria we have seen cracks come off. Demand is still tepid at best, so we are following the trend with this trade. For brokerage services across
Brent made a run for it! It broke through $77 briefly before 13:00 GMT and reinforced its position above the mark in mid-afternoon trading. A decline into the window saw it drop back into the $76 range, and it closed the European session at $76.63/bbl. Traders reported “quite a few buyers on Dated”, with limited sellside interest and that turned out to be the case in the physical window. One enthusiastic player on the sellside was Gunvor, who came out all guns blazing early in the window, offering Forties and Midland. BP joined in on the action too, offering a Forties of its own – this one was for 21-25 Jan. PetroIneos liked the look of that and lifted BP’s offer at Dated +$1.20 – pretty strong! China is back in the North Sea after a hiatus.
In the week ending 24 December, money managers were risk-off in Brent while adding length to their long positions in WTI. With crude oil markets quietening down for the holiday season, we saw proportionately lower positional changes in the latter half of December, alongside ongoing uncertainty surrounding Trump’s incoming administration policies and China’s oil demand outlook heading into 2025. RBOB futures saw a reduction in money manager long positions for the week to 24 December, while gasoil and heating oil futures showed a clear buy-side skew among speculative players.
Mar’25 Brent futures strengthened, rising from $73.40/bbl on 30 Dec to $76.90/bbl on 6 Jan, with higher highs and lows. The RSI entered overbought territory on Jan 3, while Bollinger bands widened due to increased volatility. The MACD indicated bullish momentum, but price gains may reflect opportunistic profit-taking in low liquidity.
The Saudis are a merciful bunch and didn’t want to tighten the noose too much on their customers – treat them nicely and they’ll keep coming back! The Saudis recognised the high prices in Dubai and the widening premium were a function of Totsa lifting Dubai again and again in the pricing window and did not fully reflect the price upside. Rumours circulated in Asia that Totsa made $20-30 million gains from its foray where it had a 30+ million bbl swaps position with low entry levels. The Arab Light OSP for Asia (the Saudis’ biggest buyers) was raised by 60c to reach $1.50 over the average of Dubai + Oman grades. That’s not too stringent, given the Dubai physical premium’s extraordinary strength late in December, with the penultimate premium of +$2.25 and final value of +$1.95. With the combination of bigger Chinese import quotas and a relatively low Brent flat price nearing $70 in December, and the ensuing buying rush (cough cough Totsa…), Aramco evidently chose not to reflect the bubbling up premia towards the end of the month and buyers must be happy with that!
The Mar’25 Brent futures contract fell from a daily high of $76.90/bbl at 0100 GMT to see resistance at $76.15/bbl, around level with the 21-day simple moving average, for much of the morning. It rose to $76.40/bbl at 1020 GMT (time of writing), with the daily upper Bollinger Band seemingly acting as a resistance level. Saudi Arabia plans to borrow $37 billion in 2025 to fund oil-diversification projects and repay debt, starting with a three-tranche dollar bond managed by Citigroup, Goldman Sachs, and JPMorgan. Saudi Aramco raised its February crude prices for Asia, increasing Arab Light by 60 cents to $1.50 per barrel above the regional benchmark, after hitting a four-year low in January. Asia’s crude oil imports fell 1.4% in 2024, the first annual decline since the pandemic, driven by a 1.9% drop in Chinese imports, Reuters reported. Meanwhile, India is expected to surpass China as the top driver of global oil demand in 2025, with a forecasted 3.2% growth compared to China’s 1.7%, according to S&P Global. Beijing will expand ultra-long treasury note funding in 2025 to boost company growth and consumer spending, aiming to revive the slowing economy. At the time of writing, the Mar/Apr’25 and Mar/Sep’25 Brent futures spreads stand at $0.60/bbl and $2.61/bbl, respectively.
Europe slipped back below $76 in its morning trading, shedding some of the gains it made yesterday. By lunchtime, we were looking at the mid-$75 range. Then, the Americans gave Brent a leg-up and put us back onto a $76 handle before 13:45 GMT, recovering the slide to finish at $76.33/bbl. Over in the window, Gunvor was back for another round of North Sea fun, offering a Forties CIF cargo for 15-19 Jan. Its best offer was Dated +$1 but that didn’t get any attention, so withdrew. Its other Forties offer, 19-23 Jan, came to Dated +$1.40 but likewise didn’t get a nibble. BP also offered Forties CIF 18-22 Jan and withdrew it at $1.50 over Dated. The sellers have been left out in the cold for the time being.
The late session yesterday saw Brent flat price decline below $76 again, and the Asian session flirted with that level throughout, but just failed to cling on to it, eventually closing at $75.98/bbl. Having marginally come up short of the $76 handle at the close, flat price slipped deeper into $75 following the window and settled in the mid-$75 range. On a flat price basis, physical Dubai loadings in March were significantly lower yesterday than the February loading physical Dubai as it traded in the final calendar December sessions. Yesterday, Dubai partials/Brent futures were 43c, but today gained 12c to leave Dubai partials/Brent futures at 55c. Asian demand is fierce! Buy before the yuan depreciates even further. China’s demand looks like it’s mounting a recovery – the stimulus seems to be working.
The Mar’25 Brent futures contract has steadily declined this morning from around $76.00/bbl at 0600 GMT down to $75.65/bbl at 1050 GMT (time of writing). In the news today, US President-elect Trump has called to “open up” the North Sea and get rid of windmills in a post on his social media platform Truth Social. Trump’s comments came in response to a report about Apache Corporation’s plan to exit the North Sea by year-end 2029, as per Reuters. Oil companies have been exiting the North Sea in recent decades, with production declining from a peak of 4.4mb/d of oil equivalent at the start of the millennium to around 1.3mb/d today, Reuters stated. In other news, the decline in Mexico’s crude and gas production could accelerate, potentially losing 100kb/d of production every year beginning in 2025, according to S&P Global. The report highlighted that production is falling at Pemex’s seven largest fields, with multiple major oil companies relinquishing exploration contracts in recent years, including Shell and Chevron. Finally, heating oil futures have gained 5% w/w while US natural gas prices saw a weekly rise of 4%, according to the Financial Times. The jump in prices comes as the National Weather Service warns of an “Arctic outbreak”, with the potential for sub-zero temperatures as far south as the Gulf Coast and Florida. At the time of writing, the Mar/Apr’25 and Mar/Sep’25 Brent futures spreads stand at $0.49/bbl and $2.36/bbl, respectively.
At last! Salvation for Equinor! It finally shifted some Johan Sverdrup by smashing Totsa’s offer for a 13-15 Jan cargo once it reached Dated -$0.80. Equinor had gone quiet in the second half of December having failed to garner much interest in its many JS offerings. The busyness of December’s windows saw the highest volumes of crude shipped since July, at 1.99 mil b/d according to ship tracking data. Traders didn’t waste any time getting down to business in 2025, though. It wasn’t quite as chaotic as the early December windows but it wasn’t just a start-of-month standoff either. BP wanted to get in on the action too, offering both Forties and Brent. Once Gunvor had picked up the British major’s 24-28 Jan offer at $1.25 over Dated, it withdrew its own Forties offer. Gunvor seemed indecisive, offering and lifting Forties. Not long after Gunvor lifted BP’s offer, BP seemed content with its day’s labour and withdrew its Brent offer. For February loading cargoes, quality premiums were increased across grades: Oseberg was bumped 10c, Ekofisk up 15c, while Troll rose 2c.
Welcome to Volume 2 of The Officials! 2024 was a big year for us, establishing our report and adding numerous key benchmarks, even branching out into crypto and launching our own dollar index – the ODX Asia™. Expect more exciting things in 2025, including our upcoming price discovery for Dated Brent and additional commodities, to be revealed… With a New Year, do Brent futures have a new lease of life? Asia opened up and pushed us over the $75/bbl mark for the first time since 25 November. Content with a hard day’s work, Asia gradually eased off through the rest of the session, with Brent eventually closing at $74.77/bbl. However, the foray above 75 laid the foundations for Europe to fire flat price towards $75.70/bbl at around 10:00 GMT. The mid-70s are back – we just hope the hairstyles don’t come back too.
The Mar’25 Brent futures contract was supported this morning, rising from around $74.80/bbl at 0630 GMT up to $75.60/bbl at 1050 GMT (time of writing). Market sentiment saw an optimistic start to the new year, potentially bolstered by expectations that China may introduce additional measures in 2025 to stimulate economic growth. In the news today, the International Longshoremen’s Association (ILA), a union representing cargo handlers at every major Eastern US and Gulf Coast port, is threatening to strike on 15 January, according to Bloomberg. Following a three-day strike in early October, the ILA agreed to delay further action until mid-January, now pushing for stronger protections against labour automation at ports. In other news, after the suspension of the Ukrainian natural gas transit deal, Moldova’s breakaway region of Transdniestria has cut off supply of heating and hot water to households, with Russia previously pumping about 2 billion cubic metres of gas per year to Transdniestria, as per Reuters. European front-month gas prices rose 4.3% on the first trading day of the year, the highest since October 2023, Bloomberg revealed. Finally, India’s gasoline and diesel demand saw respective increases of 9.8% and 4.9% in December y/y, according to the Economic Times. The report attributed the increase in demand to holiday travel, citing petrol sales of three state-owned fuel retailers. At the time of writing, the Mar/Apr’25 and Mar/Sep’25 Brent futures spreads stand at $0.48/bbl and $2.23/bbl, respectively.
In April we were flirting with the low $90s. Then on three occasions in H2 we’ve teased the high $60s. But Brent flat price has found its comfort zone and settled into the lower half of the $70s range throughout December. It’s been a year of two halves in terms of prices, with China’s wobble and OPEC quota delays and deliberations key drivers of price moves. Geopolitical flare ups have played their role too, with major price surges in April and October highlighting that. The rate cutting cycle that has characterised global monetary policy looks set to continue into next year.
What a year it has been! We tested low 90s and we also tested high 60s. But we are closing the year definitely towards the lower end of the range still trying to secure a $75.00/bbl beachhead for Brent as we enter the New Year. The year started with some promise for producers, as the market flirted with the low 90s trying to climb into a three-digit market… but it was not to be. Even so, Dubai ended the year on a high, with Totsa engaging in a window-based version of the classic gameshow ‘Supermarket Sweep’, hoovering up all the supply it could get its mitts on. In Ancient Greece, there was the Minotaur and nowadays in the Dubai Market there is the Major Taureau . The extremely strong Dubai physical premium we’ve seen – even reaching above $2 – in the final trading week of December puts the Saudis in a bit of an OSP pickle. How will Aramco’s leadership react to the market signals it has to contend with, even if they’re distorted, and the long-term symbiotic relationship with their customers? We’ll find out soon enough…
The Mar’25 Brent futures contract continued to strengthen in the early hours of this morning, reaching a peak of over $74.70/bbl at 0600 GMT before softening to around $74.48/bbl at 0800 GMT (time of writing) as it failed to sustain momentum to break out above the upper Bollinger band (daily), although it remains close. China’s factory activity grew more slowly in December despite recent stimulus efforts and rising trade risks. According to official data, the PMI edged down to 50.1 from 50.3 in November, staying above the 50 mark for the third consecutive month, signalling continued manufacturing expansion. Heating degree days, an indicator of energy demand for space heating, are projected to increase to 499 in the US over the next two weeks, up from the 399 forecast on Friday, according to LSEG. The firm’s meteorologists also predict colder temperatures in Europe in January. The US Treasury was hacked by a Chinese state-sponsored actor through a third-party software provider, BeyondTrust Inc., which reported the breach on Dec. 8. Described as a “major cybersecurity incident,” the attack exploited a key securing a cloud service used by Treasury staff. While China denies the claims, US agencies and forensic experts are investigating, accusing the US of spreading unfounded disinformation. The Nigerian Federal Government, working with the Nigerian Navy, aims to boost crude oil production to 3 mb/d by 2025. Output has already risen to 1.8 mb/d from 1.4 mb/d in 2023. Minister of State for Petroleum, Heineken Lokpobiri, said the newly launched second phase of the operation will be key to achieving this goal. At the time of writing, the Mar/Apr’25 and Mar/Sep’25 Brent futures spreads stand at $0.43/bbl and $2.06/bbl, respectively.
The cold is coming. Winter is tightening its icy death grip on both Europe and the US. Early January is forecast to be absolutely chilling, below average temperatures for the time of year. The Arctic temperatures making a beeline for the US will surely bolster heating demand as people rush to turn up the thermostat. US Midwest temperatures are expected to be near 12 degrees Celsius lower than their 30-year normal in early January, while temperatures in London are likely to fall by up to 10 degrees Celsius by the end of this week. And markets have reacted, with both Henry Hub and TTF futures jumping on the expectation for intense heating demand.
Totsa drove up the price of Dubai to above $75.00/bbl, the highest price for any benchmark crude in December. Brent
closed the Asian market at $74.09 and WTI further behind at $70.50. Totsa, the Taureau, as we call them, had the horns on
all month, buying and buying and buying Dubai. In December, the French major has bought a total of 33 physical cargoes
in the Dubai window. Upper Zakum is the preferred grade this month, making up 26 cargoes of the total 38. The physical
premium started the month at $0.89 and with one trading day left in the month it reached $2.25/bbl. This premium has
huge implications for the economics of Asian refining as it will surely lead to a huge jump in Saudi OSPs of over $1.00
relative to the current OSPs. The rise in flat price and premiums then affects consumers across many nations, affecting
billions of people, without any exaggeration. Totsa is believed to have reacted and grabbed the opportunity created by extra
import quotas given to selected Chinese buyers.
The Mar’25 Brent futures contract continued to strengthen daily but has been slipping hourly; after gapping higher this morning, it has softened to oscillate around the simple 20-day moving average for the last few hours. Mar’25 fell from a high of $73.90/bbl at 0100 GMT to $73.55/bbl at 1025 GMT. According to several trade sources on Monday, Reuters reported that China has issued at least 152.49 million metric tons of crude oil import quotas to independent refiners in a second batch for 2025. In Nigeria, troops dismantled 66 illegal refining sites and disrupted a network of oil theft operations, according to Major General Edward Buba. Recovered assets included 657,470 litres of stolen crude oil, 127,870 litres of automotive gasoil, and 5,000 litres of dual-purpose kerosene. The UAE’s economy grew 3.6% in the first half of the year, driven by a 4.4% rise in non-oil GDP to Dh660 billion, 75% of the total Dh879.6 billion GDP. Economic diversification, boosted by entrepreneurship, investment, and tourism, fueled the growth, said Minister of Economy Abdulla bin Touq. Bharat Petroleum Corp, an Indian state-run refiner, is turning to Middle Eastern crude to offset the reduced availability of cheaper Russian oil, according to finance head Vetsa Ramakrishna Gupta. Indian refiners, which typically buy Russian oil on the spot market, are struggling to secure 8-10 million barrels for January loading, sources said. At the time of writing, the Mar/Apr’25 and Mar/Sep’25 Brent futures spreads stand at $0.47/bbl and $2.04/bbl, respectively.
Traders in the first European session after Christmas were back for more Brent, sending flat price upwards. It even looked ready to challenge the $74 ceiling for the first time since last Thursday, and it finally did, just after 14:00 GMT, peaking at $74.12, before cooling off slightly to close at $73.99/bbl. This range is sticky and flat price is stuck in the mud, lurching between $72 and $74 without being able to break through either conclusively or for more than moments – as we saw again this afternoon. Post-window it slid back down towards $73.70/bbl and then bounced back following the big crude draw reported by the EIA. The further you pull an elastic band, the further it will rebound the other way.
Totsa ate everyone up, we would say . They are winning big time, and all the sellers are licking their wounds wishing they had not sold so early. Truly a magnificently engineered play! All the signs were there from the moment the Chinese issued the extra buy crude tender. Now the Taureau is just stomping on the shorts, snorting as it gores them away. If we could give them the orange award for master presseur we would . There were very few Dubai offers late on, just bids flying around like a swarm of confused sparrows as sellers tried to swipe them out of the air. Of the final 9 trades, just 1 was an offer being lifted – by Totsa of course . Naturally, many of the bids swarming the sellers came from Totsa too, but Mercuria and Glencore weren’t going to be left out. The variety of sellers did their best to keep a lid on things but they just couldn’t do it. Look no further than the Dubai physical premium for proof: we know it was strong yesterday, but today the premium soared to $2.16! OMG, we say to the shorts, RIP!
The Mar’25 Brent futures contract softened to $72.70/bbl at 06:35 GMT but strengthened to $73.05/bbl by 10:15 GMT (time of writing).
The European Christmas cheers continued on the first day back after the brief holiday. The positivity sent Brent flat price higher. Brent futures closed the Asian session at $73.85/bbl, $0.93/bbl up on the day. Dubai partials, meanwhile, zoomed up even more settling at $74.55/bbl, a massive $1.26/bbl up! Asia’s stolen a march while Europe’s busy enjoying itself and gorging on mince pies. Totsa is winning big time! And Dubai keeps on going. They say the sky’s the limit… let’s see if that rings true.
Flat price is vacillating, up and down like some who are already enjoying Christmas. What the hell, the moves are minor, so don’t worry. The window saw a flat price slip, from above $73.30 to below $73, though it found some support in the $72.90s. But it quickly rebounded towards $73.20. It’s like a kid who can’t decide whether to play with the bear or bull action figures it just unwrapped for Christmas. Or someone who had one too many And then it came back down again… After all that choppy window action, Brent ended European trading at $73.17/bbl. Up and down faster than Father Christmas in a chimney!
‘Twas the night before Christmas, when all through the house / Not a creature was stirring, not even a mouse. Except Totsa. Totsa was awake and rummaging through the Dubai window looking for cargoes like an excited child sifting through a Christmas stocking on the hunt for chocolate. Buyers and sellers exchanged partial gifts all in good Christmas spirit. Right? And the French were rewarded with another 4 convergences! They got three Upper Zakums: one from each of BP, Exxon and Reliance. Trafi wanted to be different to the rest and nominated an Oman. By our counting, that makes a total of 29 convergences in December in the Dubai window, of which 27(!!) have gone to Totsa. More than one cargo per calendar day and working towards half of the Upper Zakum monthly program. Don’t call it a squeeze, call it a Christmas embrace. Tight we know So far, two other cargoes went to Mitsui and Glencore, who’ve been left to fight for Totsa’s leftovers all month. Thank you to our kind readers for helping to cross-check the data! Singapore friends, you are awesome!
The Mar’25 Brent futures traded from $72.50/bbl at 3:50 GMT to $72.65/bbl at 06:25 GMT (time of writing) amid thin liquidity ahead of Christmas.
It was a flat price slip and slide. Throughout the Asian session Brent flat price remained supported just above $73 before Europe came in and put an end to that. By the window, we were even troubling the low $72 range. Team America didn’t even bother turning up to try and arrest the downward momentum, which saw Brent end far down on the day, at $72.06/bbl. Perhaps they’re already tucking into the mince pies.
Totsa continues to vacuum clean the Dubai floor. Anything the market throws at them, Totsa sucks up. And they are
winning; the premium is jumping. The food fight has moved from the North Sea window to the Dubai window. And it’s getting
messy with Totsa fully dominating the market. More bids, more lifting… it’s become a deeply entrenched pattern of the
Dubai windows for months now. An offer from BP, they’ll take it. Something pops up from Trafi, they’ll snatch that. Unipec
or Exxon places an offer and it’s bound to get a hammering from Totsa. All the sellers seemed to get their fair share of
smacking. Only a few sellers got to return the favour by hitting a Totsa bid, but Vitol, Exxon and Equinor all managed to
squeeze it into their busy schedules. The French zeal saw Totsa gain yet more convergences: one each from Phillips and
Trafi, which both handed out Upper Zakum. By our counting, that gives Totsa 23 convergences so far in December – not
quite on par with November, but still a vast volume. The market is a bit dry and premia react – the Dubai physical premium
surging 97c yesterday to $1.12 today!
The Feb’25 Brent futures flat price traded around the $73.30/bbl level overnight Monday before falling by nearly 50c and below $73/bbl within half an hour, trading $72.94/bbl at 10:00 GMT. In the news, a second drone attack in a week targeted Russia’s Oryol fuel depot on 22 Dec, causing a fire that was quickly extinguished, amid a series of Ukrainian strikes on strategic energy infrastructure. Russia’s Druzhba pipeline resumed crude supply to Belarus on 21 Dec after a two-day halt due to a technical issue, with operations now reported as normal. China’s CNOOC announced the start of production at its Suizhong 36-2 oilfield block development in Liaoning Bay, Bohai Sea, with plans for 21 wells and peak output projected at 9,700 barrels of oil equivalent per day by 2026. Methane emissions in the Permian Basin, the heart of US oil production, fell 26% in 2023 as producers responded to regulatory pressures, societal demands, and economic incentives, though concerns linger over the sustainability of progress under potential policy rollbacks. Finally, the front (Feb/Mar) and 6-month (Feb/Aug) Brent futures spreads are at $0.37/bbl and $1.79/bbl respectively.
We saw good Brent support at around $72.00/bbl and the line roughly held. The downward momentum was first arrested
at noon bouncing back towards the mid-$72 point, choppy as the indecisive Americans couldn’t pick between up or down,
so in the end they picked both and flat price bounced up and down, with a climb through the window to close at $72.80/bbl.
Before 15:00 GMT, we were threatening to go below $72 again, but there’s plenty of resistance to going lower, so flat price
just keeps vibrating in the same narrow range and clung on to the $72 handle. The only ones making money are the volatility
sellers. Tight trading ranges suggest many European traders have closed out their positions and shut up shop for the
holidays, but the American traders are more active.
Totsa’s cleaning up in Dubai! The window was inundated with Totsa bids, and the host of sellers did their best to smack them but they just couldn’t keep up. Reliance, Exxon and Mitsui were all trying their best to clear the trading table of Totsa’s endless bids. Vitol took on the lion’s share of the work trying to keep a lid on things, clobbering as many of Totsa’s bids as it could. But even that wasn’t enough to get through the mountain of Totsa bids and the Frenchman had three left untouched bids by the time the window no closed and Les Amis withdrew them. The French vacuum cleaner didn’t limit itself to just bidding and was also lifting offers left, right and centre. With such aggressive bidding from Totsa and sellers’ hands full, the Dubai physical premium edged up to 97c, the strongest so far in December. A $1 premium is tantalising!
Feb’25 Brent futures softened from $72.55/bbl at 0600 GMT to $72.20/bbl at 10:30 GMT (time of writing). The Financial Times reported today that Shell secured Nigerian government approval for a $2.4 billion onshore and shallow-water asset sale to Renaissance Group by committing to a $5 billion investment in the Bonga North deepwater project, with over 300mb of recoverable resources and an expected peak production of 110 kb/d. The strong dollar has contributed to record lows for the Rupee, Real, and Won. China’s one-year bond yield fell to 1% for the first time since 2009, and Bitcoin dropped 12.5% to $95k amid a broader asset market sell-off. US PCE price index data is due today. President-elect Donald Trump threatened the EU with tariffs unless it buys more US oil and gas, stating on Truth Social, “Otherwise, it is TARIFFS all the way!!!” The EU Commission has not commented on the claim. At the time of writing, the front (Feb/Mar’25) and 6-month (Feb/Aug’25) Brent Futures spreads are at $0.43/bbl and $1.76/bbl, respectively.
Flat price doesn’t look very flat. The graph shows the volatility of the past couple of days: a consistent decline following the bombshell Powell speech last night and a choppy climb today, especially after lunchtime, as the Americans woke up, apparently having taken stock of the Fed fallout. But the Brent price range is very restrictive and the market doesn’t like seeing it go too far either way at the moment, so it quickly toppled back down to under $73. Major events but constrained volatility. These price fluctuations are small but relentless. Today it was still a very narrow range of barely more than a buck, as the market sees little cause for optimism on supply and demand fundamentals, but there’s plenty of buying from China whenever flat price descends towards $70 and lots of technical support around that level.
Only one man has the power to send everything plummeting at the same time. Mr Power Powell. And only Total has the power to vacuum dry the Dubai market! The Power! Powell’s press conference had almost every asset class tripping and tumbling. Oil didn’t like it either and slid in the latter hours of American trading last night. A small jump in Brent flat price of around 20c on the rate cut announcement was overshadowed by Powell’s hawkish rhetoric and the subsequent slide down to around $73, 60c lower than before the announcement. Though the dollar’s now the highest in 2 years, so that’s surely a key driver in oil’s price slide. Asia was happy to catch its breath, reassess and consolidate, but Europe didn’t like the news when it woke up, so pushed it down even further and it fell all the way to $72.87/bbl by the close of the Asian session.
The Feb’25 Brent futures flat price came off to the $73/bbl level overnight before rising to $73.36/bbl by 10:00 GMT (time of writing). Price action is slightly lower following the Fed’s rate cut, as policymakers signalled a more hawkish stance for 2025, which supported the dollar and was hence bearish for oil prices. In the headlines, Glencore has increased its Middle East oil purchases, acquiring Al-Shaheen and Upper Zakum grades, to supply Singapore’s Bukom refinery acquired from Shell earlier this year. The refinery includes a 237kb/d crude distillation unit. Ukraine launched 13 missiles and 84 drones targeting Russia’s Rostov region, sparking a fire at the Novoshakhtinsk refinery, which was extinguished, amid ongoing strikes on Russian oil infrastructure critical to its war economy. Sinopec forecasts China’s petroleum consumption will peak by 2027 at no more than 800 million tons annually, driven by declining diesel and gasoline demand due to LNG and EV adoption, while the petrochemical sector increasingly dominates oil usage and natural gas consumption peaks higher and earlier than previously estimated. Finally, the front (Feb/Mar) and 6-month (Feb/Aug) Brent futures spreads are at $0.40/bbl and $1.77/bbl respectively.
Prices are again flirting with $74 bucks as the sparring continues in the North Sea although no punches were landed. The window players calmed down from yesterday’s chaotic showing. Today they were all pushing Midland around. Gunvor and Equinor brought it to the table, while Mercuria and Totsa were bidding. BP came in to offer Ekofisk, but all the attention was centred on Midland, so it didn’t get any interest. But the price wasn’t right for anybody and there wasn’t a single trade today. Not a sausage ☹. Although Totsa wasn’t keen on buying North Sea physical cargoes today, that didn’t stop it buying up loads of CFDs in the window!
The French Connection keeps on connecting More Upper Zakum for Totsa! This time it’s Reliance providing the UZ, while Vitol gave the French behemoth another Oman convergence. We’ve tallied them up and that makes 15 convergences in the Dubai window to Totsa so far this month! Unsurprisingly, the window showed yet another bidding frenzy by Totsa, whose bids overshadowed those of Mitsui, Phillips and Hengli. Bid after bid came flying down on the creaking deals table, as Totsa slammed its fist and shouted for attention! Again, it took a plethora of sellers to hold the rampaging bull at bay: Exxon stepped up to the plate again, while Vitol and Reliance obviously slapped a few Totsa bids too, and Equinor joined in on the fun again. After another exciting instalment of the long-running Totsa Show, the Dubai physical premium firmed up to reach 95.5c, marginally stronger than its previous December high. Is a $1+ coming? Do the bears like the woods?
