Crude

Crude oil derivatives are essential to the global economy, powering transportation, manufacturing, and financial markets.

Crude oil is refined into petroleum products such as gasoline, naphtha, fuel oil, LPG and diesel.

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Overnight & Singapore Window: Brent Recovers To $71.80/bbl

November 15, 2024

After coming off overnight from $72.60/bbl to lows of $71.40/bbl, the Jan’25 Brent futures contract recovered slightly this morning, trading at $71.63/bbl at 07:00 GMT and moving up to $71.80/bbl around 10:45 GMT (time of writing). Crude oil prices were volatile as poor Chinese demand continued to weigh on market sentiment, with prices falling to a low of $71.37/bbl at 08:00 GMT. In the news today, refinery run rates in China fell for the seventh month in a row from 14.3mb/d in September to 14.02mb/d in October, decreasing 4.6% y/y, according to data from the National Bureau of Statistics quoted by Reuters. In other news, the US State Department announced today that the US would impose sanctions on 26 companies, individuals, and vessels associated with Al-Qatirji Co., a Syrian business alleged to be facilitating the sale of Iranian oil to Syria, as per S&P Global Commodity Insights. Finally, ExxonMobil has announced that it has reached 500mb of oil produced from Guyana’s offshore Stabroek Block, just five years after starting production. At the time of writing, the Jan/Feb’25 and Jan/Jul’25 Brent futures spreads stand at $0.28/bbl and $1.08/bbl, respectively.

Trader Meeting Notes: When Trump Met Biden

November 14, 2024

A bafflingly coherent Biden skipped the COP29 to have an ecstatic lunch/photo op with Trump in the White House, and with all the big liberal names missing the conference, the only real news came from a righteous speech from Azerbaijan president Ilham Aliyev, who argued crude oil is a “gift from God”. Who are we to argue? It’s been a week since the election and Brent saw an unremarkable weekly downtrend as other assets are soaring. Bitcoin is at an all-time high, and the Dow Jones is still extremely strong. Net positioning from money managers in Brent crept up in the week to 5 Nov, likely due to risk-averse shorts taking profit. Outside of the States, China’s trade surplus is on track to hit a record of almost $1 trillion and German industry saw the worst slump in orders since ’09. It seems with the presidential election over and the OPEC+ barrels’ return pushed back the market is struggling to look away from economic weakness.

European Window: Brent Weakens To $72.05/bbl

November 14, 2024

After initial strength this afternoon, the Jan’25 Brent futures contract ultimately saw weakness this afternoon, moving from $72.45/bbl at 12:00 GMT up to $73.20/bbl 14:20 GMT down to $72.05/bbl at 17:45 GMT (time of writing). EIA data released today at 16:00 GMT for the week to 8 Nov showed a build of 2.09mb in US crude oil inventories, with US gasoline inventories falling to their lowest levels since Nov 2022. In the news today, according to a Reuters report, a senior Lebanese official Ali Hassan Khalil said Lebanon was ready to implement UN Security Council resolution 1701, which ended a 2006 war between Israel and Hezbollah. Channel 12 has reported that a response from Lebanon to a ceasefire proposal sent to Beirut from the US could come within the next 24 hours. Meanwhile, Eli Cohen, Israel’s energy minister, told Reuters “we are at a point that we are closer to an arrangement than we have been since the start of the war”. In other news, Norway’s oil investment has hit an all-time high, estimated at $22.9 billion for this year compared to the previous record of $20.4 billion in 2014, Statistics Norway stated in its Q4’24 survey of companies’ investment plans. At the time of writing, the Jan/Feb’25 and Jan/Jul’25 Brent futures spreads stand at $0.30/bbl and $1.14/bbl, respectively.

Overnight & Singapore Window: Brent Increases To $72.55/bbl

November 14, 2024

The Jan’25 Brent Futures contract was volatile but saw strength this morning, increasing from $71.85/bbl at 07:00 GMT up to $72.55/bbl at 10:50 GMT (time of writing). Prices reached $72.45/bbl at 09:05 GMT but quickly fell to $72.00 at 09:20 GMT before recovering. In the news today, Libyan oil output is under threat amid protests in response to the kidnapping of a senior intelligence officer Mustafa al-Whayshi. According to Africanews, the protesters blame the Tripoli government for this incident and have shut down oil distribution valves which connect the Sharara and El Feel oilfields to a refinery in Zawya, a facility with a processing capacity of 350kb/d. In other news, TotalEnergies has awarded engineering contracts worth at least $3 billion as part of its fast-track development of Suriname’s first offshore project, according to Reuters. This included a contract with French firm TechnipEnergies for $1.1 billion to build a floating production storage and offloading vessel, projected to startup in 2028 with an expected oil output of 220kb/d and total crude oil capacity of 2mb. Finally, a Bloomberg report has shown that India’s trade deficit widened in October significantly to $27.1 billion, compared to a survey forecast of $22 billion. Imports grew 3.9% in October y/y while exports rose by 17.3%. At the time of writing, the Jan/Feb’25 and Jan/Jul’25 Brent futures spreads stand at $0.33/bbl and $1.22/bbl, respectively.

European Window: Brent Recovers To $72.35/bbl After Sell-Off

November 13, 2024

The Jan’25 Brent futures contract sold-off mid-afternoon from $72.20/bbl at 13:30 GMT down to $70.80/bbl at 15:00 GMT, however, made a recovery to $72.35/bbl at 18:00 GMT (time of writing). Crude prices saw pressure amid Iranian Oil Minister Mohsen Paknejad’s statement that Iran has taken measures to sustain oil production and exports in preparation for potential Trump sanctions, claiming “there is no reason to be concerned”. Meanwhile, 13 Nov’s EIA Short-Term Energy Outlook projected that India could account for 25% of total oil consumption growth globally in 2024 and 2025, with withdrawals from global oil inventories expected to increase amid ongoing geopolitical risk and OPEC+ production cuts. In the news today, the Mexican government is expected to unveil a draft for its 2025 budget later this week, in which $6 billion from the budget could be allocated to support the debt obligations of state oil giant Pemex, according to a Bloomberg report. Pemex’s total debt sits at almost $100 billion, with around $9 billion in debt maturing next year. In other news, the Russian Energy Minister Sergey Tsivilev said it could be possible to lift the gasoline export ban, currently in force until the end of the year, now that there is stability in domestic fuel supply. Finally, in macroeconomic news, the release of US CPI data at 13:30 GMT today showed an increase to 2.6% in October from 2.4% in September, in line with market expectations. At the time of writing, the Jan/Feb’25 and Jan/Jul’25 Brent futures spreads stand at $0.35/bbl and $1.19/bbl, respectively.

Overnight & Singapore Window: Brent Rises To $72.45/bbl

November 13, 2024

After trading rangebound overnight, the Jan’25 Brent futures contract saw support this morning, moving from $72.00/bbl at 07:00 GMT up to $72.45 at 10:35 GMT (time of writing). In the news today, Financial Times has revealed that Russia’s energy minister Sergei Tsivilev attempted to combine the country’s oil majors, involving the nationalisation of Lukoil and tightening control over Rosneft and Gazprom. Tsivilev introduced this ambitious idea during his initial meeting with President Vladimir Putin last month, but Putin has yet to greenlight his plan. In other news, Japan Petroleum Exploration (Japex) is looking to invest in the US tight oil and gas sector, with the aim of becoming an operator, according to Japex Executive Officer Yutaka Nishimura. Today, Japex reported a 24% y/y drop in net profit to $136 million for the April to September period, largely due to the yen’s rise against the US dollar, as per Reuters. Meanwhile, Kazakhstan’s biggest oil field Tengiz, operated by US major Chevron, has reduced oil output by around 21% on average since 26 Oct to 496kb/d, industry sources told Reuters. Finally, China has announced tax cuts from the current 3% to 1% for first and second home buyers, as part of their fiscal policy measures to boost the ailing property market. At the time of writing, the Jan/Feb’25 and Jan/Jul’25 Brent futures spreads stand at $0.25/bbl and $0.92/bbl, respectively.

Dated Brent Report – Trump: The Arb of the Deal

November 12, 2024

There was an election across the pond last week, but it would be quite a feat of mental gymnastics to immediately connect the results with the Dated Brent market. Yet, the ramifications of Trump’s re-election may have significant implications for Atlantic Basin fundamentals, as we detail in today’s Onyx Alpha trade ideas report. Maybe not quite ‘drill baby drill’, but ongoing growth in US crude production and exports will likely weigh on the WTI/Brent spread, and further weigh on the Dated Brent physical. But in the meantime, the market continues to be topsy turvy. A US physical player has been eager to lock in this arb and fixing their paper deals ahead of time. The HTT (WTI Houston vs WTI Trade Month) has been locked in, alongside the WTI/Brent and freight. Basis risk remains, so we can expect 2025 DFLs to be sold at anytime to complete this process. Indeed, the arb of the deal. Lock in.

European Window: Brent Volatile at $72.10/bbl

November 12, 2024

The Jan’25 Brent futures contract ultimately weakened amid volatility this afternoon, trading from $72.30/bbl at 12:00 GMT up to $72.80/bbl at 14:30 GMT and falling to $71.60/bbl by 16:20 GMT, before recovering to $72.10/bbl at 17:45 GMT (time of writing). Crude oil prices fluctuated this afternoon as the market reacted to the release of the November OPEC monthly oil market report for October. In the news today, OPEC’s monthly report showed that the return of Libyan oil production to full capacity raised total OPEC crude oil output to an average 26.53mb/d last month, a 466kb/d increase since September. Output rose mainly in Libya, Nigeria, and Congo while production in Iran, Iraq, and Kuwait saw the largest decrease in October. OPEC now expects global oil demand to grow by 1.82mb/d this year, down by 107kb/d from last month’s report. In other news, Indian Petroleum Minister Hardeep Singh Puri told Reuters that India aims to increase the capacity of existing refineries and become a regional refining hub to other countries. According to Reuters, Indian Oil Corp expects to complete the expansion of its Panipat and Gujurat refineries by December 2025, adding over 14 million tons per annum. At the time of writing, the Jan/Feb’25 and Jan/Jul’25 Brent futures spreads stand at $0.23/bbl and $0.92/bbl, respectively.

Overnight & Singapore Window: Brent Supported At $72.30/bbl

November 12, 2024

The Jan’25 Brent futures contract saw support this morning, moving from around $71.70/bbl at 07:00 GMT up to $72.30/bbl at 10:50 GMT (time of writing). In the news today, Israel has failed to meet a series of US aid demands to ease the humanitarian crisis in Gaza. A letter from the US on 13 Oct stipulated that Israel must take steps to improve the aid situation within 30 days and if not could face restrictions on US military aid, as per Reuters. In other news, in an official company statement, Rosneft has denied any plan to merge Russia’s largest oil companies into one entity, claiming “the alleged intentions [have] nothing to do with reality” and do not follow “any reasonable business logic”. Finally, Exxon’s Darren Woods has urged US president Trump not to leave the Paris Agreement on climate change, saying that it would create “a lot of uncertainty” and be counterproductive as administrations change. At the time of writing, the Jan/Feb’25 and Jan/Jul’25 Brent futures spreads stand at $0.24/bbl and $0.82/bbl, respectively.

European Window: Brent Declines To $71.80/bbl

November 11, 2024

The Jan’25 Brent futures contract continued to weaken this afternoon from $72.85/bbl at 12:00 GMT down to $71.80/bbl at 17:55 GMT (time of writing). This afternoon, Israeli Foreign Minister Gideon Saar in Jerusalem has stated there was a “certain progress” in ceasefire talks with Hezbollah. In the news today, Saudi Arabia is projected to deliver 36.5mb of crude to China in December, reduced from an expected 37.5mb for November amid weak Chinese oil demand, according to trade data compiled by Reuters. December would mark the second consecutive month of lower Saudi deliveries to China. In other news, India has become the EU’s largest fuel exporter this year by taking advantage of a refining loophole, as reported by Finland’s Centre for Research on Energy and Clean Air (CREA). This loophole allows non-Russian countries to process crude oil without restrictions on its origin, despite Western sanctions. Between Q1 and Q3’24, this allowed the Jamnagar, Vadinar, and new Mangalore refinery to export 58% more oil products to the EU y/y, while India was the second-largest buyer of Russian fossil fuels following China in October. Finally, US national gasoline prices have fallen to a 3-year low today at $3.03/gal, the lowest since May 2021. At the time of writing, the Jan/Feb’25 and Jan/Jul’25 Brent futures spreads stand at $0.20/bbl and $0.77/bbl, respectively.

Refinery Margins Report 2024-11-11

November 11, 2024

The Jan’25 Brent futures contract weakened this morning, trading at $73.95/bbl at 07:00 GMT and selling off from $74.05/bbl at 09:10 GMT to $72.90/bbl at 10:20 GMT, inching down further to $72.80/bbl at 10:45 GMT (time of writing). Crude oil prices sold off as the market continues to react to weakening Chinese oil demand and the declining risk of Hurricane Rafael to US Gulf Coast oil infrastructure. In the news today, Chinese customs data showed that China’s crude imports were at 10.53mb in October, a decrease of 8.7% y/y and down from 11.07mb in September, according to Reuters. In other news, the Syrian state news agency SANA made initial reports of an Israeli attack in Homs’ southern countryside in central Syria, with Israel allegedly targeting an aid gathering centre for displaced Lebanese citizens. Finally, Russia is considering a merger of Rosneft, Gazprom, and Lukoil, as per the Wall Street Journal. This would entail Rosneft absorbing the two smaller companies, resulting in the world’s second-largest oil company after Saudi Aramco and a combined capacity of almost 7.5mb/d. At the time of writing, the Jan/Feb’25 and Jan/Jul’25 Brent futures spreads stand at $0.24/bbl and $0.84/bbl, respectively.

Overnight & Singapore Window: Brent Sells-Off To $72.80/bbl

November 11, 2024

European Window: Brent Weakens Further To $73.95/bbl

November 8, 2024

The Jan’25 Brent futures contract weakened further this afternoon, trading at around $74.90/bbl at 12:00 GMT and selling-off from $74.85/bbl at 14:10 GMT down to $73.95/bbl at 17:45 GMT (time of writing). Crude oil prices fell as Hurricane Rafael is forecast to weaken and move away from the US Gulf Coast oilfields in coming days, the US National Hurricane Center said. In the news today, Iran’s oil loadings fell from nearly 1.83mb/d in September to 1.48mb/d last month, marking a daily decline of 350kb/d, according to Kpler Senior Analyst Homayoun Falakshahi. The Wall Street Journal reported that US President Trump plans to renew his ‘maximum pressure’ campaign against Iran, drastically increasing sanctions in order to hamper Tehran’s ability to support its proxies in the Middle East. In other news, Iraq’s parliament is due to discuss a new bill on oil exports, a Kurdish MP Sabah Subhi told Kurdistan24. Subhi was optimistic an agreement between Iraq and Kurdistan could be reached, however, highlighted growing security concerns surrounding potential supply disruption in Iraq, claiming any instability would be “catastrophic”. Finally, the Israeli military it is planning to reopen the Kissufim crossing into central Gaza to increase flow of aid into the strip, amid growing pressure from aid agencies. At the time of writing, the Jan/Feb’25 and Jan/Jul’25 Brent futures spreads stand at $0.30/bbl and $1.12/bbl, respectively.

Overnight & Singapore Window: Brent Declines To $74.50/bbl

November 8, 2024

The Jan’25 Brent futures contract weakened this morning from $75.10/bbl at 07:00 GMT down to $74.50/bbl at 10:25 GMT (time of writing). Crude oil prices weakened amid the unveiling of China’s $1.4 trillion stimulus package. Chinese officials neglected to announce additional measures to boost domestic demand, potentially disappointing markets according to a Financial Times report. In the news today, Petrobras reported a 22% increase in its Q3’24 net profit at $5.7 billion. This was partly due to several operational milestones including the start of oil production at Petrobras’ Mero-3 platform with a capacity of 180kb/d and at their FPSO Maria Quiteria with a capacity of 100kb/d. In other news, Citigroup claimed a Trump presidency may be net bearish for crude prices on higher domestic production and tariffs. Meanwhile, Standard Chartered said US producers won’t necessarily heed Trump’s call for more drilling. Finally, the UN Human Rights Office stated that women and children account for nearly 70% of fatalities it has verified in the Gaza war thus far, condemning what it called a systematic violation of the fundamental principles of international humanitarian law, as per Reuters. At the time of writing, the Jan/Feb’25 and Jan/Jul’25 Brent futures spreads stand at $0.32/bbl and $1.27/bbl, respectively.

Trader Meeting Notes: Trump 2.0

November 7, 2024

It was a historic week for the US as someone had to change Grover Cleveland’s Wikipedia from ‘only’ to ‘first’. Landslide results, comparable to 1964, point to a similarly anxious America, with Google searches for ‘WW3’ up 15% in the week and worryingly, searches for ‘who is running for president’ seeing a 200% weekly increase. LBJ’s 1964 “We must love each other, or we must die” may be too sentimental and ‘nineteen sixties’ for Trump 2.0, but “I’m going to stop wars” and “let’s stop killing people”, but it inspires some hope that the geopolitical risk volatilities may lessen. The market has a few months of processing time to check the effects of tariffs, regulations, sanctions, and drill baby drill, but the initial market reaction has been a bit measured. The possible sanctions on Venezuela and Iran, and the potential relief from the Russian sanctions have been the supply conversation points. Still, we’re talking long-term here, and the immediate impact on the flat price was quickly reversed by some offshore drilling evacuation. There are a few months to prepare before the official handover for Nancy Pelosi to clean out her portfolio of anything green whilst the Dems figure out who to point the finger at.

European Window: Brent Rallies To $75.70/bbl

November 7, 2024

The Jan’25 Brent futures contract rallied from $74.25/bbl at 12:00 GMT today up to $75.70/bbl just after 17:30 GMT (time of writing). Crude oil prices rose amid expectations of a 25 basis point Fed rate cut to be announced at 19:00 GMT tonight. Earlier today, the Bank of England cut interest rates by 25 bps from 5% to 4.75%. In the news today, Hezbollah lawmaker Ibrahim al-Moussawi said that the Lebanese group welcomes any effort to stop the conflict but does not pin hopes for a ceasefire on any particular US administration, as stated in a Reuters report. In other news, China’s crude oil imports remain low in October at 10.53mb/d (-9% y/y), marking the sixth straight month where oil imports have fallen compared to the same months in 2023, according to data from the General Administration of Customs. This follows reduced capacity at PetroChina’s largest refinery in Dalian and weak demand from independent Chinese refiners. Finally, Ghana’s crude oil output has increased by 10.7% y/y in the first six months of 2024, at 24.9mb for June 2024, the country’s Public Interest and Accountability Committee (PIAC) reported. The increase was primarily driven by Tullow Oil’s Jubilee South East (JSE) project, which commenced production in late 2023, as per Reuters. At the time of writing, the Jan/Feb’25 and Jan/Jul’25 Brent futures spreads stand at $0.37/bbl and $1.44/bbl, respectively.

Overnight & Singapore Window: Brent Weakens To $74.30/bbl

November 7, 2024

The Jan’25 Brent futures contract strengthened this morning from $74.30/bbl at 07:00 GMT up to $74.58/bbl at 10:50 GMT (time of writing). Price action was choppy this morning as traders adjust their positions in light of US President Trump’s victory in the US election. At the time of writing, Trump holds 277 of the 270 electoral votes required to win, while Harris holds a total of 224. In addition, prices were pressured by a much higher than expected 3.13mb build in US crude oil inventories, according to API data for the week to 01 Nov. In the news today, Iran’s Revolutionary Guards deputy chief Ali Fadavi stated that Tehran is prepared for a confrontation with Israel and would not rule out a preemptive strike by the US and Israel following Trump’s election win, according to the Times of Israel reposted in a note by Giovanni Staunovo. In other news, Iraq is expected to start delivering crude oil from Kurdistan to its state-owned company SOMO, with a $16/bbl rate set for foreign oil companies operating in Iraqi Kurdistan, as per Reuters. Deliveries of Kurdish crude oil were previously suspended for over a year amid a dispute between the central Iraqi government and Turkey over authorization of the deliveries. At the time of writing, the Jan/Feb’25 and Jan/Jul’25 Brent futures spreads stand at $0.38/bbl and $1.48/bbl, respectively.

European Window: Brent Futures Increases To $75.30/bbl

November 6, 2024

The Jan’25 Brent futures contract saw consistent strength this afternoon, ultimately increasing from $74.60/bbl at 12:00 GMT to $75.30/bbl at 17:40 GMT. Crude oil prices rallied from around $73.40/bbl at 13:50 GMT up to $75.92/bbl just after 16:00 GMT as the market reacted to increasing threats to US Gulf Coast oil production from Hurricane Rafael and US President Trump’s election victory. A build of nearly 2.15mb compared to an expected 1.8mb in US crude oil inventories for the week to 01 Nov, announced in EIA data released at 15:30 GMT, led to a 40c drop to $74.95/bbl but otherwise had little effect as Brent continued to strengthen. In the news today, Russian Energy Ministry data showed the nation’s crude oil production in October was at 8.97mb, up 3kb/d from September and just 5kb/d above the OPEC+ quota for the month. In other news, Iraq’s oil exports were recorded at 3.3mb/d in October, according to Oil Ministry figures, with the government continuing to restrain output in response to pressure from OPEC+. Finally, India’s oil demand rose by 2.9% y/y in October to nearly 20.04 million metric tons, with gasoline, LPG, and aviation turbine fuel accounting for the largest increases in demand, according to PPAC reposted in a note by Giovanni Staunovo. At the time of writing, the Jan/Feb’25 and Jan/Jul’25 Brent futures spreads stand at $0.39/bbl and $1.52/bbl, respectively.

Overnight & Singapore Window: Brent Strengthens To $75.40/bbl Amid Trump Victory

November 6, 2024

Dubai Market Report – Sweet and Sour (Fundamentals)

November 5, 2024

The key detail this fortnight has been the dichotomy between the Bal-Nov/Dec’24 and the Dec/Jan’25 Brent/Dubai boxes. The Balmo box initially saw trade house and producer selling, taking it down 12c d/d at the start of November to $0.15/bbl.

European Window: Brent Strengthens To $75.50/bbl

November 5, 2024

Jan’25 Brent futures flat price saw further support this afternoon, increasing from $75.35/bbl at 12:00 GMT up to $75.95/bbl at 17:30 GMT, before falling to $75.50/bbl around 18:00 GMT (time of writing). Crude oil prices were supported amid potential short covering and rebalancing of portfolios ahead of the US election, in addition to a sustained market reaction to OPEC delaying their December production hike until January. In the news today, Iranian crude oil supplied to China has reached its most expensive price in five years, with the discount of Iran Light crude to ICE Brent narrowing to below $4/bbl from between $5-6/bbl earlier this year, according to Reuters. This came as Iran’s cargo loadings slumped last month amid concerns that Israel would target Iranian energy facilities in their retaliatory missile attack.In other news, Marathon plans to operate its 13 refineries at 90% of combined capacity in Q4’24, amounting to production of 2.95mb/d, as per Reuters. Furthermore, Marathon’s Q3’24 profit beat Wall Street estimates on better-than-expected refining throughput of 3mb/d compared to the forecasted 2.84mb/d. Finally, state-run Oil India has missed its Q2’24 profit targets on lower crude prices and weak fuel demand, totalling around $218 million in comparison to analysts’ expectations of $222 million. At the time of writing, the Jan/Feb’25 and Jan/Jul’25 Brent futures spreads stand at $0.40/bbl and $1.59/bbl, respectively.

Dated Brent Supplementary Report – One Last Bullish Hurrah

November 5, 2024

Over the past week, the Dated Brent market has been undoubtedly bullish as physical differentials rose from $0.28/bbl to $0.55/bbl between 28 Oct to 4 Nov. Petroineos have been consistent bidders, whilst Geneva-based trade houses were bidding Forties, lending support to near-term physical demand. Brent’s flat price has been buoyed by OPEC+ delaying plans to increase output, which has also lent support to Brent spreads. In addition, rising gasoil prices have improved refinery margins, providing a more supportive backdrop for crude. The Nov’24 DFL has risen from $0.30/bbl to $0.50/bbl w/w, while deferred spreads have largely corrected higher after initially seeing a drastic drop at the beginning of last week (28 Oct to 01 Nov) following the deflation of geopolitical risk.

Overnight & Singapore Window: Brent Supported At $75.40/bbl

November 5, 2024

The Jan’25 Brent futures contract saw strength this morning, trading from $75.05/bbl at 07:00 GMT up to $75.39/bbl at 10:45 GMT (time of writing). Crude oil prices have been supported amid potential for Hurricane Rafael to disrupt 4mb/d of oil production in the US Gulf Coast, according to Reuters. In the news today, Russian oil and gas revenue has jumped 57% m/m in October to $12.35 billion, as per Russian finance ministry data. Meanwhile, a Bloomberg report shows Russia’s seaborne crude weekly exports for the week to 3 Nov dropped by 530kb/d, the biggest decline since early June. This came as Russia made no shipments from the Arctic port of Murmansk and only one shipment from Novorossiysk on the Black Sea. In other news, France’s foreign minister Jean-Noel Barrot is expected travel to Israel on Wednesday to work towards a diplomatic end to the conflicts in Gaza and Lebanon. Barrot stated France would work with whoever wins the US election and that the US “plays an essential role in ending the Israeli-Arab conflict”. Finally, trading firms are projected to deliver an unusually large volume of about 5mb of Middle East crude oil to the Shanghai International Energy Exchange (INE) this month, as per Reuters. Vitol are to deliver the most crude to INE, about 3mb, including about 840kb of Abu Dhabi Murban crude and 2mb of Iraqi Basra Medium crude. At the time of writing, the Jan/Feb’25 and Jan/Jul’25 Brent futures spreads stand at $0.43/bbl and $1.65/bbl, respectively.

European Window: Brent Supported At $75/bbl

November 4, 2024

The Jan’25 Brent futures contract initially saw weakness this afternoon, trading from $75.25/bbl at 12:00 GMT down to $74.30/bbl around 15:50 GMT, before recovering to $75.15/bbl at 17:45 GMT (time of writing). Despite profit-taking flows, prices overall have been supported following the OPEC+ decision to delay a production hike for another month. In the news today, according to a Reuters survey, OPEC oil output was up 195kb/d in October m/m, with Libya posting the largest gain of up to 400kb/d. Crude oil production in Venezuela reached 860kb/d, the highest since at least 2020, while Iraq cut crude oil output by 120kb/d, amid lower exports and domestic consumption. In other news, developing Tropical Storm Rafael is projected to strengthen into a hurricane late Tuesday as it moves northwest from the Caribbean towards offshore oil production areas in the Gulf of Mexico, as per the US National Hurricane Center. Finally, according to Argus Media, Asia-Pacific refiners have increased their intake of US light sweet WTI for November loading, buying around 1.3mb/d of WTI loading compared to roughly 800kb/d in October and could remain keen buyers in December. Meanwhile, European demand for crude is expected to rebound in December following the end of autumn refinery maintenance, with Ekofisk adding around 60c/bbl relative to WTI since mid-October. At the time of writing, the Jan/Feb’25 and Jan/Jul’25 Brent futures spreads stand at $0.42/bbl and $1.57/bbl, respectively.

Overnight & Singapore Window: Brent Finds Strength At High $74/bbl Levels

November 4, 2024

After rallying at market open this week from $72.90/bbl on 01 Nov to $74.35/bbl last night, the Jan’25 Brent futures contract showed steady support this morning, climbing from $74.40/bbl at 07:00 GMT up to $74.70/bbl just after 10:40 GMT (time of writing). Crude oil prices were elevated amid an OPEC+ decision on Sunday to extend its output cut of 2.2mb/d by another month, initially planning to increase production in December. In the news today, according to a Reuters report, Israel has officially notified the UN that it is cancelling the agreement that regulated relations with the UN relief organization for Palestinian refugees (UNRWA) since 1967, fuelling concerns of a worsening humanitarian situation in Gaza. This came as Palestinian medics claimed Israeli airstrikes killed at least 31 people in the Gaza strip on Sunday. In other news, China’s refining output is set to fall to 14.7mb/d this quarter on thin margins and weak demand, in addition to maintaining lower run rates in Q1’25, as per Reuters. Finally, Eni has sold $1 billion worth of upstream offshore assets in Alaska to US private company Hilcorp, planning to raise €8 billion in net proceeds between 2024-2027 to fund the growth of its low-carbon units. At the time of writing, the Jan/Feb’25 and Jan/Jul’25 Brent futures spreads stand at $0.41/bbl and $1.42/bbl, respectively.

European Window: Brent Futures Declines to $73.30/bbl

November 1, 2024

The Jan’25 Brent futures contract weakened this afternoon, moving from the $74.30/bbl level at 12:00 GMT down to $73.30/bbl at 17:30 GMT (time of writing). Crude oil prices sold-off 80c just after 14:20 GMT, declining to $73.47/bbl at 14:50 GMT, amid the release of US manufacturing PMI data at 14:00 GMT showing a contraction to 46.5 in October, compared to a forecast of 47.6. In the news today, according to a Bloomberg report, oil supplies from OPEC increased by 370kb/d to 29.9mb/d in October, with Libya adding 500kb/d after the end of the central bank feud and Iraq cutting 90kb/d. In other news, Venezuela’s oil exports have reached a four-year high, approaching 950kb/d in October, as per Reuters. The boost in oil exports is the result of increased crude output and more sales to India and the US, according to ship tracking data. Finally, Exxon reported $8.61 billion in their Q3-24 earnings, down 5% y/y, while hitting a 40-year liquids production high at 3.2mb/d. Meanwhile, Exxon has sold the Fos-sur-Mer refinery in France to a consortium composed of Entara and Trafigura. At the time of writing, the Jan/Feb’25 and Jan/Jul’25 Brent futures spreads stand at $0.38/bbl and $1.27/bbl, respectively.

Overnight & Singapore Window: Brent Trades At $74.30/bbl

November 1, 2024

The Jan’25 Brent futures contract strengthened this morning from $74.05/bbl at 07:00 GMT up to $74.65/bbl at 10:10 GMT, before coming off to around $74.30/bbl at 10:35 GMT (time of writing). Crude oil prices saw support amid reports that Iran is preparing a major retaliatory attack on Israel by proxy from Iraq in the coming days, with US officials continuing to work towards an Israel-Lebanon ceasefire deal in the meantime. In the news today, Israel hit Beirut’s southern suburbs with airstrikes aimed at Hezbollah assets early this morning, in the first such strikes in days targeting the dense urban area. In other news, according to S&P Global, Russia is not planning to lift its gasoline export ban early due to ongoing refinery turnarounds and high retail prices, after Russian officials indicated in September that the ban could be lifted early on the condition of a gasoline surplus. Turnarounds are expected to continue at several Russian refineries into the first half of November, including the Norsi, Ryazan, and Volgograd facilities. Finally, a Ukrainian drone has crashed into an oil depot in Russia’s Stavropol region, reported by a local governor Vladimir Vladimirov on Telegram. This follows yesterday’s drone attack on the Russian region of Bashkortostan, where major oil company Bashneft operates several large refineries. At the time of writing, the Jan/Feb’25 and Jan/Jul’25 Brent futures spreads stand at $0.41/bbl and $1.33/bbl, respectively.

European Window: Brent Supported At $72.75/bbl

October 31, 2024

After rallying this morning, the Jan’25 Brent futures contract saw continued strength this afternoon, moving from $72.65/bbl at 12:00 GMT up to $73.23/bbl at 15:25 GMT, however, price tapered off to $72.75/bbl by 18:05 GMT (time of writing). Crude oil prices were supported with ongoing uncertainty regarding a potential Israel-Lebanon ceasefire deal. In the news today, the IMF has cut their Middle East GDP growth outlook to 2.1% for this year, slashed by 0.6% from their April forecast. According to the IMF, this comes amid continuing regional conflict and expectations of a delay in OPEC+ oil production cuts. In other news, TotalEnergies missed the analyst estimate of $4.27 billion profit for Q3’24, reporting an adjusted net income of $4.1 billion on weaker refining margins and lower LNG production. Finally, Rosneft’s Tuapse oil refinery, one of Russia’s biggest Black Sea refineries, is due to resume operations in November. The facility was suspended from 1 Oct because of low margins on refined fuels, however, is expected to process about 480,000 metric tons of crude oil next month, as per Reuters. At the time of writing, the Jan/Feb’25 and Jan/Jul’25 Brent futures spreads stand at $0.37/bbl and $1.16/bbl, respectively.

Trader Meeting Notes: Taxes, Tensions and Trash Trucks

October 31, 2024

Brent gapped down on the open on Monday as a chunk of geopolitical risk was removed following a bearish market reaction to Israel’s attack on Iranian military bases. US-backed ceasefires continue to bring some hope, and geopolitical tensions are semi-resigned to the backburner of public attention. Betting sites show Trump’s next presidency at a 65% sure thing, although national polls are pretty tight. With a week until the big day, the US has been focused on establishing who is and is not ‘garbage’. The moral highpoint surrounding Trump’s comedian’s Puerto Rico gaffe dropped like SMCI stocks as Biden had his very own garbage gaffe. Macro releases from the States are pretty murky and seem a step away from the clean, soft landing that was discussed. More polls indicate an even split from ‘analysts’ as to whether OPEC will return the promised/threatened December barrels. The return being in question, let alone out loud, seems far from a good thing.

European Window: Brent Rises To $72.35/bbl

October 30, 2024

The Jan’25 Brent futures contract strengthened this afternoon, increasing from $71.90/bbl at 12:00 GMT up to $72.35/bbl at 17:45 GMT (time of writing). Price spiked 75c up to $72.65/bbl shortly before 12:30 GMT amid an OPEC+ announcement that the oil production hike planned for December could be delayed by more than a month, as per Reuters. In addition, EIA stats released at 15:30 GMT for the week to 25 Oct showed a draw of 0.5mb in US crude oil inventories, which supported prices further. In the news today, US mediators are working on a 60-day ceasefire between Israel and Hezbollah, as per Reuters. Meanwhile, Israel has continued its attack on Lebanon, targeting the city of Baalbek today. In other news, according to a Bloomberg report, oil production in Guyana dropped 11% in Q3’24 while Exxon temporarily shut two of its three vessels for maintenance. Hess Corp., which has a 30% stake in the Stabroek Block, stated that its share of production declined to 170kb/d from 192kb/d in Q2’24. Finally, Russia’s Gazprom has boosted its 2024 investment plan by 4% to $16.9 billion thanks to rising exports and domestic supply. The company continues to develop projects aimed at increasing gas supply to China, according to Gazprom’s Deputy Chairman of the Management Committee, Famil Sadygov. At the time of writing, the Jan/Feb’25 and Jan/Jul’25 Brent futures spreads stand at $0.37/bbl and $1.07/bbl, respectively.

Overnight & Singapore Window: Brent Strengthens To $71.80/bbl

October 30, 2024

The Jan’25 Brent futures contract strengthened marginally this morning, moving from $71.70/bbl at 07:00 GMT to touch $71.80/bbl at 10:30 GMT (time of writing). Price action was volatile this morning alongside fluctuating geopolitical risk premia, spiking to almost $72.10/bbl around 08:30 GMT before descending below $71.50/bbl at 10:00 GMT. We also saw downward pressure amid resuming Israel-Lebanon peace talks, with an Axios report stating that US President Biden’s senior advisors are travelling to Israel tomorrow in an attempt to close the ceasefire deal. In the news today, crude oil production at Mexican state-owned giant Pemex was at nearly 1.75mb/d in September, down 1.2% y/y, according to a note by Giovanni Staunovo. In other news, PetroVietnam said today that Saudi Aramco is looking to invest in oil refining, petrochemicals, and oil product distribution in Vietnam, as per S&P Global. Aramco CEO Amin Nasser stated the oil giant will send a working group to Vietnam soon to advance discussions on multiple projects, however, specific details are yet to be disclosed. Finally, CNOOC has signed an oil contract with Iraq’s state-run Midland Oil Company to develop the Block 7 field, located in the Diwaniyah province. While CNOOC anticipates a large discovery of crude oil, appraisals are needed to accurately understand Block 7’s reserve potential, as per Reuters. At the time of writing, the Jan/Feb’25 and Jan/Jul’25 Brent futures spreads stand at $0.35/bbl and $0.86/bbl, respectively.

Dated Brent Report – Strength in Chaos

October 29, 2024

The Brent futures market was taut in anticipation and volatility last week as the leak of intelligence about the, at the time, looming Israeli strike on Iran meant that the waiting game would have to continue, and there were fewer clues. The front spreads have been rangebound over the fortnight, and the DFL market has superseded this, allowing for the Dated-to-Lead (DFL vs Brent spreads) structure to swing up. The question for spreads is whether they see the support from the Dated structure ripple through the DTL reverting, or whether the anticipated heavy pressure in the futures structure will strike through the structural integrity of the curve. The physical differential dropped to around 5c on 17 Oct and has gently been implied higher since.

European Window: Brent Falls To $70.60/bbl Level

October 29, 2024

Jan’25 Brent futures flat price weakened this afternoon, falling from around $71.90/bbl at 12:00 GMT and finding a floor around $70.30/bbl at 15:30 GMT before rising to $70.68/bbl at 17:30 GMT (time of writing). Crude oil prices faced downward pressure amid persistent concerns over weak Chinese demand, as well as reports of a scheduled meeting between Israeli Prime Minister Netanyahu and his ministers to discuss potential resolutions to the conflict in Lebanon, according to Axios. In the news today, an OilChem survey indicated that China plans to reduce fuel exports by 14.2% in November. Total fuel exports are projected at 2.54 million tons, with allocations for gasoil and kerosene down by 28% and 18% compared to October, respectively. In other news, Angola’s Cabinda oil refinery is set to be commissioned between January and February, the CEO of Gemcorp has stated. Meanwhile, the first supplies of fuels are projected to reach local markets between March and April. The greenfield project will refine 30kb/d of Angolan Cabinda crude and supply 5-10% of the country’s needs, according to Reuters. Finally, Phillips 66 plans to operate its refineries between the low to mid 90% range capacity in Q4’24, making for a combined capacity of 1.5mb/d, as per Reuters. At the time of writing, the front-month (Jan/Feb’25) and six-month (Jan/Jul’25) Brent futures spreads are at $0.33/bbl and $0.83/bbl, respectively.

Overnight & Singapore Window: Brent Futures Strengthens To $71.75/bbl

October 29, 2024

The Jan’25 Brent futures contract strengthened from $70.90/bbl at 07:00 BST to $71.75/bbl at 10:35 BST (time of writing). Prices saw support this morning amid reports of Chinese power demand growing faster than expected in 2024. In the news today, according to the China Electricity Council’s Q3’24 report, the country now sees 2024 electricity consumption growing by 7% to 9.9 trillion kWh. In its previous report, the group had forecast 6.5% growth to 9.82 trillion kWh. In other news, Israel is maintaining the intensity of its attacks on Gaza, with a Reuters report stating at least 60 Palestinians were killed and dozens wounded in an Israeli strike on a residential building in the northern Gaza town of Beit Lahiya today. Finally, Reuters reports that Mexico has sent a crude oil cargo of 400kb to Cuba, which is expected to arrive by the end of the week. Cuba is currently experiencing a series of blackouts alongside food and fuel shortages. At the time of writing, the front-month (Jan/Feb’25) and six-month (Jan/Jul’25) Brent futures spreads are at $0.37/bbl and $1.04/bbl, respectively.

European Window: Brent Weakens To $71.35/bbl

October 28, 2024

The Jan’25 Brent futures saw an interesting trend this afternoon as price action initially rose from the $71/bbl level at 13:00 GMT, creating a triple top pattern near $71.90/bbl before falling lower to $71.35/bbl by 17:30 GMT (time of writing). Alongside reports of PetroChina’s plan to shut its largest refinery in 2025, the Jan’25 contract tested the $71.90/bbl level on multiple occasions throughout the afternoon. However, crude oil prices ultimately failed to sustainably stay above this level, amid a removal of some of the geopolitical risk premium previously supporting oil prices. In the news today, state-owned PetroChina is projected to shut its Dalian Petrochemical plant in 2025, which accounts for 410kb/d, or 3%, of the total Chinese refinery output, according to Reuters. In other news, Chinese oil and gas exploration company CNOOC reported a net profit of $5.2 billion for Q3’24, up by 9% y/y from 2023. In the first nine months of 2024, CNOOC made 9 new discoveries and appraised 23 oil and gas-bearing structures. In other news, IndianOil, the biggest refiner in India, has released its Q2’24 results, showing that the company’s net profit fell by 98.6% y/y, partly influenced by low fuel demand in the monsoon season. At the time of writing, the front-month (Jan/Feb’25) and six-month (Jan/Jul’25) Brent futures spreads are at $0.34/bbl and $0.92/bbl, respectively.

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