Short July/Aug 0.5 Sing Oil refiners across Asia are bringing back some idled capacity after maintenance, As much as 400,000 barrels of daily capacity, or more than 10% of what was taken down last month, will return to service in
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.
Long Jul Barge 0.5% Crack We have seen a rise in the Jul crack this morning. Although there has been good supply of LSFO recently, the market position has been getting longer according to Onyx CoT.
TARGET PRICE: $82-84/bbl Although we expect Brent futures to remain supported above the $80/bbl region, we hold a neutral outlook this week, with the front-month August contract to finish the week between $82/bbl and $84/bbl. This is predicated on three
Short Jul 0.5 EW Nigeria’s newly built Dangote refinery are activating their production of low Sulphur fuel oil which get exported to Singapore. This could weakened the east by increasing an already oversupplied market. This is also supported by the
Short Jul 0.5% Sing Crack According to market and ship tracking data, Singapore, Asia’s main oil hub, is set to receive this week the first cargo of low-sulfur straight-run fuel (LSSR) oil exported from Nigeria’s newly built Dangote refinery. There
Long Jul NWE Naphtha Crack Naphtha cracks have held firm despite weaker gasoline and stronger flat price, so we think there is still an overhang of gas/nap length keeping naphtha supported, so we’d suggest following the recent trend higher For
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.
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.
Short Jul Euro Hi5 Demand for HSFO in Europe has seen a slight uptick lately, with higher bunkering requirements ahead of the summer as the main factor behind the recent HSFO strength. LSFO consumption across Northwest Europe and the Mediterranean
TARGET PRICE: $78-80/bbl We expect Brent to trade on either side of $80/bbl this week, with a slight bearish bias. We are looking for the front month August contract to finish the week between $78-80/bbl. This call is predicated on
Brent trumped bearish macro sentiment and the EIA stats.
The likely unwinding of stretched short positions trumped bearish drivers this week, driving Brent above our end-week target.
Long Aug 380 E/W With the Middle East already suffering from high summer temperatures and drawing in a lot of HSFO for generating power, we expect to see demand increase in the East for Aug. Inventories have improved in Singapore
Long the Jul/Aug 92 spread This spread got to highs of 55 , but then got pressured down to 35 levels due to physical selling and profit taking. The 92 complex has been supported in the front, due to
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.
Short Jul/Aug 3.5 spreads Demand in Europe is still tepid alongside ample stockpiles, as we get closer to summer cooling season, demand shall pick up and inventories should fall. Alongside this, Jul/Aug 3.5 Barges is trading high in the overbought
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.
Asian low sulphur fuel oil market structure has weakened over the last couple of days of June, with cash differential for the marine fuel grade dropped to a five-week low amid competitive offers and weaker deals for June-loading physical cargoes. There is persistent lacklustre bunker demand in Singapore, which is expected to see additional supplies coming from Europe in the coming weeks.
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.
Long Jul 380 Crack With recent U.S data released it has implied the U.S economy is experiencing more contraction which has put aggressive downward pressure on Brent, with demand for 380 increasing supported by prompt spread buying, we believe the
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.
Onyx Capital Group is proud to announce the launch of ‘The Officials’, a publication highlighting and providing fair values for the main derivative energy markets.
Onyx is delighted to welcome Harry Tchilinguirian as Group Head of Research. With an illustrious career spanning over three decades in research within the commodity markets, there is nobody better equipped to take on the unique and specialised role as
Trade Idea 1: Long Jul TA Arb A closed transatlantic arb currently should be putting pressure on NYH prices to increase relative to Europe to incentivise more bbls moving. Although there are multiple ways the physical arb can open back
Short Jul 0.5% Sing Crack We have seen an increase in fuel oil inventories in Singapore this week due to lower demand and good supply coming from the Middle East. Looking at the Onyx CoT the market position has been
Over the past 2 weeks we have seen downward pressure on the 0.5 E/W with news from the East that there was little demand after tenders issued by Al Zour refinery in Kuwait. However…
Long 0.5% Sing Jun/Jul There has been tepid demand for LSFO at the moment and with Al Zour refinery issuing tenders at the beginning of May there has been a good supply. But we expect that to correct a little
Short Jun 0.5 Euro crack European 0.5 Barges has been very weak recently due to tepid demand alongside Europe ample stock piles. We have seen a slight pull back in Euro 0.5 Euro which is now entering the overbought zone
Long Jun 380 Crack Tighter supplies and relatively healthy downstream demand have strengthened the Asian high sulfur fuel oil complex in recent weeks, although we have seen a drop in the last couple of days we believe it has found
Short Jun 380 E/W It looks like the tide has turned. According to Onyx CoT it indicates that Jun is now overbought, with RSI at 93. As reported Tuesday, it has been on a steady rise, from $21 up to
There has been tepid demand of Sing 0.5% along with Al Zour refinery in Kuwait releasing tenders in April and May for VLSFO meaning there is ample supply. However 380 seems to be a tighter supply at the moment, with
For Brokerage services across the barrel and to receive our weekly trade ideas, contact insight@onyxcapitaladvisory.com
For Brokerage services across the barrel and to receive our weekly trade ideas, contact insight@onyxcapitaladvisory.com
For Brokerage services across the barrel and to receive our weekly trade ideas, contact insight@onyxcapitaladvisory.com
For Brokerage services across the barrel and to receive our weekly trade ideas, contact insight@onyxcapitaladvisory.com
The North Sea window was a chaotic affair. Forties, Brent and Midland were hurled across the floor. There were plenty of bids for FOB Forties – from Mercuria, Mitsui and a rare appearance from Petraco. But the Forties offers were for CIF cargoes only. Gunvor’s 19-23 Jan CIF Forties got picked up by Trafi at Dated +$1.35. Having both offered and lifted Forties yesterday, BP returned to offer Forties again today, but didn’t get any interest.
However, the British major also offered Brent for 22-24 Jan and lowered its offer to Dated +$0.20, sparking buying interest from Mercuria who bought the cargo at this level. Gunvor entered the window offering Midland and didn’t budge from its original offer of $1.60 over Dated for a 20-24 Midland. Eventually, PetroIneos scooped this up at the offered price. A messy one but that’s when it’s most fun 😊
Another week brings another selection of new trade ideas from Onyx Research, this time looking at trades in crude oil and gasoline swaps. Our weekly Onyx Alpha report presents speculative and hedging trades based on technical analysis and data-driven tradecraft methods on Onyx Commitment of Traders (COT) and Flux Financials data.
The window saw 2025’s first convergence, on the fourth trading day of the year. No prizes for guessing who picked it up. Of course it was Totsa. And naturally it was Exxon providing. Exxon declared an Upper Zakum cargo to the thirsty French aspirateur. Totsa was happy to lift bids from any of a number of sellers. Unipec’s offers, those from Trafi or Reliance, they all got a bashing. Vitol got a smack too, as did Shell. But the number of sellers was overwhelming, as Totsa’s mighty effort failed to halt the slip in both the Dubai physical flat price and Dubai physical premium from yesterday. The buyside players were few in number, but Totsa’s aggression made up for its solitude. Only Mercuria and BP were also there, and their bids went largely unnoticed in the sea of Totsa lifting and sellers working at full speed to keep a handle on the rampaging Taureau. Despite another impressive showing from Totsa, the Dubai physical premium slipped to $1.56, 5c down on the day. Is the indefatigable monster finally flagging? Can it make it to Chinese New Year in February, when we’ll get a couple of days with no Singapore window?
The Mar’25 Brent futures contract initially declined this morning from around $76.30/bbl at 0615 GMT down to almost $75.90/bbl at 0900 GMT, before recovering to $76.60/bbl at 1030 GMT (time of writing). In the news today, South Sudan’s government has directed the Dar Petroleum Operating Co. (DPOC) to begin resuming oil output on 8 January, in a letter seen by Bloomberg. DPOC operates in Block 3 and 7, with a government target for crude production projected to reach 90kb/d in the first six months. In other news, India’s refining capacity is set to expand 20% by 2028 amid growing domestic and overseas demand for oil products, the country’s petroleum minister Hardeep Singh Puri stated. S&P Global Commodity Insights estimates India’s refining capacity could reach 300 million metric tonnes by 2028, with 58% of this increase coming from brownfield expansions. Finally, Nigeria’s Seplat intends to raise its production output from around 50,000 barrels per day to 120,000 barrels per day within six months, after recently acquiring Exxon Mobil’s assets in the West African country, as per Financial Times. At the time of writing, the Mar/Apr’25 and Mar/Sep’25 Brent futures spreads stand at $0.62/bbl and $2.62/bbl, respectively.
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.
