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.
The Jun Brent futures flat price witnessed a sharp rally last Friday (April 19), surging back into the $90/bbl region before easing off to $87.20/bbl handles the following evening.
As players remain uncertain about wartime risk premia impacting the futures, the volatility appears to have hit oil products in varied ways. See all the updates across the barrel in this week’s Onyx Commitment of Traders report, as well as 6 one to watches for the week ahead.
After a relatively rangebound week, with Jun Brent futures oscillating around the $90/bbl mark and hitting highs of $92.18/bbl on Apr 12, Brent futures has opened weaker following the weekend’s events – retracing to below the $90/bbl mark.
As Brent strengthened to above the $90/bbl mark, products felt the heat. See all the updates across the barrel in this week’s Onyx Commitment of Traders report, as well as six one to watches for the week ahead.
As Brent pushes towards the $90/bbl mark, product cracks have taken a hit. See all the updates across the barrel in this week’s Onyx Commitment of Traders report, as well as 6 one to watches for the week ahead.
Oil prices clocked in a momentous week with the June Brent futures contract jumping from $88.80/bbl at 17:00 BST on Apr 04 to the sanctified $90/bbl marker just two hours later and ending the week coming close to $92/bbl.
As Brent pushes towards the $90/bbl mark, product cracks have taken a hit. See all the updates across the barrel in this week’s Onyx Commitment of Traders report, as well as 6 one to watches for the week ahead.
After a rangebound week, with Jun Brent futures oscillating around the $85/bbl mark, Brent futures strengthened in the lead up to the Easter bank holiday weekend. Support continues to be found, surpassing the $89/bbl mark on Apr 02.
Oil prices registered some strength overnight on the back of support generated in the early hours of Asian trading with the Jun Brent futures climbing to $85.40/bbl at 03:20 GMT. The futures eased to $85.35/bbl come 09:20 GMT, but remain elevated compared to last Friday’s plummet into the sub-$85/bbl handles.
As the market reacts to a bullish Brent reaching its highest value since October 2023, see all the updates across the barrel in this week’s Commitment of Traders report, as well as six one to watches for the week ahead.
After surging to four-month highs towards the end of last week, May Brent futures started the week in a similar vein, strengthening to briefly surpass the $86/bbl mark and record a near 5% increase week-on-week.
In a year of stagnant crude oil prices, our latest article delves into why traders are turning to a lesser-known segment of the oil market for lucrative opportunities. We examine the intricate dynamics driving recent developments in North Sea oil within this niche.
As Red Sea tensions re-intensify and Ukraine launch a wave of drone attacks on Russian infrastructure, potential value opens up across the barrel. See all the updates in this week’s Commitment of Traders report, as well as six one to watches for the week ahead.
As we leave February in the past and April rolls to the prompt, opportunities are arising across the barrel. See all the updates in this week’s Commitment of Traders report, as well as six one to watches for the week ahead.
The strength seen last week has continued, with May Brent futures starting the week in the $84/bbl handles, marking a 2.3% increase week-on-week.
The Apr Brent futures contract continued to be supported overnight with prices holding above the $83/bbl mark initially before dipping below it and trading at $82.77/bbl at 10:00 GMT (time of writing). Apr WTI saw a similar softening as prices were at $77.62/bbl at 10:00 GMT.
Oil prices were seen hovering around the $82.75/bbl handles on Monday morning after last week witnessed the Brent futures for the Apr contract rise by over 1%, following a 6% gain in the previous week.
The April Brent futures is trading at $83.21/bbl at the time of writing, 16:45 GMT. The contract traded down to a low of $81.97/bbl at noon and subsequently experienced a steady rise throughout the afternoon to settle around the $83/bbl mark.
Prompt Brent futures flat price has seen a much stronger afternoon. Prices were supported from $80.74/bbl at 11:40 GMT to $83.14/bbl at 16:45 GMT.
Amid Middle Eastern tensions getting more priced in day on day, the possibility for reversals across the barrel could be on the horizon? See all the updates in this week’s Commitment of Traders report, as well as six one to watches for the week ahead.
The Apr Brent futures contract continued to be supported overnight with prices holding above the $82/bbl mark and trading at $82.72/bbl at 10:00 GMT (time of writing). Apr WTI saw a similar upward momentum with prices at $77.66/bbl at 10:00 GMT.
Oil prices dipped slightly into Monday, back into $81/bbl handles, after seeing a 6% gain last week having fallen 9% a week previous, with heavy price swings very characteristic of the market at the moment.
The Brent futures flat price for the prompt contract has seen a relatively weak morning. Price action initially found stability in the high $81/bbl-handles, reaching highs of $81.98/bbl at 05:30 GMT.
The Apr Brent futures contract has seen increased support overnight with prices strengthening above the $79/bbl mark and seen at $79.14/bbl at 10:00 GMT (time of writing). Apr WTI saw a similar upward momentum with prices at $74/bbl at 10:00 GMT.
The Apr Brent futures contract has been very volatile over the day and seems to be moving sideways amid a mixed bag of news. The contract was seen trading around the $77.50/bbl handles and dropped to a daily low of $76.63/bbl at 14:50 GMT. At 17:00 GMT (time of writing), prices were trading at $77.38/bbl.
The Apr Brent futures contract has been very volatile over the day with prices constantly between the $81/bbl and the $81.50/bbl marks. At 17:00 GMT, it was trading at $81.30/bbl. At 18:00 GMT (time of writing), prices have dipped below the $80/bbl mark to be priced at $78.96/bbl.
The Brent futures flat price for the Apr contract has seen a minor rally this morning. Initially price action was seen weakening to $80.19/bbl at 08:40 GMT, however this spurred some buying interest, taking the contract to above the $81/bbl mark, reaching $81.19/bbl at 09:20 GMT.
The Brent futures flat price for the April contract has seen a weaker afternoon, as prices fell from $82.23/bbl at 14:20 GMT to lows of $80.56/bbl at 16:45 GMT, before recovering slightly to just shy of the $81/bbl mark at 17:00 GMT.
Brent futures have been coming off over the start of the day, with the Apr contract trading from highs of $82.46/bbl at 08:30 GMT to retrace to $81.73/bbl at 10:00 GMT (time of writing). WTI prices have followed the same trend, trading at highs of $77.74/bbl at 08:30 GMT and at $77.06/bbl at 10:00 GMT.
The past fortnight saw the soon-to-be-prompt Mar Brent/Dubai contract rise above 80c/bbl on Jan 16, before sinking to 50c/bbl by Jan 24 and then rise again to 60/bbl come Jan 29.
The Apr Brent futures contract has weakened throughout the day and traded from above the $83/bbl mark to be priced at $82.16/bbl at 17:00 GMT (time of writing). WTI Apr prices have also come off today, initially trading above the $78/bbl mark and currently at $77.02/bbl at 17:00 GMT.
Apr Brent Futures started the week supported above $82/bbl.
The Brent futures flat price for the Apr contract has seen a minor sell off this morning. Initial stability kept prices in the $83/bbl handles, before selling interest saw price action retrace downwards to $82.58/bbl at 09:55 GMT.
The Mar Brent futures contract has yet again strengthened throughout the day, reaching almost two-month highs of $81.51/bbl at 16:50 GMT and later retraced to trade at $81.47/bbl at 17:05 GMT (time of writing). WTI prices also found strong support and traded at $76.60/bbl at 17:00 GMT.
Nov’24 Brent futures flat price took a steep decline this afternoon, pricing around $72.70/bbl at 12:00 BST followed by a high of $73.50/bbl at 14:50 BST before plummeting to $70.82/bbl at 17:15 BST (time of writing). In the news today, Iran’s crude oil exports were reduced to around 3.3 mb/d last month in compliance with OPEC+ supply restrictions, compared to an output of 3.48 mb/d in July. The Iraqi oil ministry has said the country will maintain a reduced level of oil exports in coming months, according to Reuters. In other news, state-owned Saudi Aramco lowered the OSP of its Arab Light crude for buyers in Asia by 70 cents to $1.30/bbl, according to a price list by Bloomberg. Finally, Nigeria’s new upstream deal with Italian energy major Eni plans to boost its production output to 2 mb/d by the end of 2024, Nigeria’s Minister of State Petroleum Resources said. At the time of writing, the front month (Nov/Dec’24) and six-month (Nov/May’25) Brent futures spreads are at $0.33/bbl and $0.88/bbl, respectively.
The Nov’24 Brent futures contract has been more rangebound this morning, with the crude futures flat price rising to $73.20/bbl around 09:10 BST to then decline to $72.65/bbl around 09:40 BST to finally firm up to $73/bbl as of 11:20 BST (time of writing)….
Behold a Pale Force (Majeure) in Libya which was swiftly undermined as the four bears of the low 70s arrived. ETF rolling, CTA and macro-driven selling were joined by OPEC+, hinting at delaying the gradual reintroduction of supply. This acted to undermine any demand narrative, not that the US or China had been doing much to prove the opposite. Highs of $77.50/bbl were fleeting, and Nov’24 Brent was pushed back to 73 with OPEC not really in the same position it was in ’73. The reintroduction of Libyan barrels is inevitable and likely largely priced in.
Nov’24 Brent futures flat price shot up this afternoon from $73.25/bbl at 12:00 BST to a high of $74.14/bbl around 15:45BST, followed by a sharp descent down to $72.53/bbl at 17:15 BST, before rebounding back to $73/bbl around 17:30 BST(time of writing). The sell-off in oil price comes after the US Energy Information Administration (EIA) published their weeklyreport, stating a commercial crude inventory decline of 6.9 mb for the week to August 30, which was lower than APIestimates of 7.4 mb. In other news, China’s oil demand is growing at the slowest pace in the last 15 years with a decline of-2% YTD (excluding the COVID downturn), analysts at Bernstein said today. The drop in demand refl ects a wider slowdownin the Chinese economy with a lagging industrial sector, reduced property investment and consumer spending. Lastly, theKashagan oil fi eld in Kazakhstan is scheduled to be shut down for 4 weeks in October this year for maintenance. Inresponse, Kazakhstan’s energy ministry has sent a request to shareholders in the Kashagan oilfi eld to delay maintenance,citing gas shortages. At the time of writing, the front month (Nov/Dec’24) and six-month (Nov/May’25) Brent futures spreadsare at $0.40/bbl and $1.35/bbl, respectively.
Nov’24 Brent futures flat price spiked this morning from $72.90/bbl at 07:00 BST to the $73.20/bbl handle at 11:45 BST (time of writing). In the news today, Mark Lashier, CEO of Phillips 66, told Bloomberg that a refining capacity shortage is looming globally and could take effect as soon as next year, estimating a cut of 700,000 bpd from the market. The chief executive’s comments come after reports last month that US refiners were planning production cutbacks due to low margins. In other news, South Sudan and China National Petroleum Corp. are considering establishing a crude pipeline to boost oil exports, which is set to traverse Ethiopia and Djibouti. South Sudan’s President Salva Kiir has met with the CNPC chairman in China to discuss setting up refinery and distribution networks. Finally, weak US job openings data (JOLTS) released on Wednesday is continuing to fuel economic worries and risk aversion, with private sector jobs now lower than in early 2019. At the time of writing, the front month (Nov/Dec’24) and six-month (Nov/May’25) Brent futures spreads are at $0.42/bbl and $1.47/bbl, respectively.
This afternoon, Nov’24 Brent futures flat price showed steep downward movement from $74.50/bbl at 12:00 BST down to $73.19/bbl at 17:30 BST (time of writing), spiking briefly to $74.05/bbl around 15:45 BST. In the news today, engineers at Libya’s Brega port are reported to have seen a 600,000-barrel oil tanker loading, according to Reuters. This latest development comes despite the recent blockade on Libyan oil exports authorized by the eastern government. In other news, in Colombia, protests against increases in the price of diesel are threatening fuel supplies and state oil company operations at Ecopetrol. The protestors are utilising tactics such as roadblocks and attacking the Cano Limon-Covenas and Bicentario pipelines. Lastly, Spain’s crude oil imports from Venezuela have increased greatly since 2023, with new data published by Reuters today. Spain has imported a total of 1.7 million tons between January-July 2024, compared to a total of 1.4 million tons in 2023. At the time of writing, the front month (Nov/Dec’24) and six-month (Nov/May’25) Brent futures spreads are at $0.47/bbl and $1.67/bbl, respectively.
After trading around the $73/bbl level overnight, the November Brent futures flat price saw another collapse on Wednesday morning where price action fell to lows of $72.64/bbl at 09:00 BST. From 11:22 BST, prices spiked by $1 over two minutes from $73.46/bbl to $74.56/bbl as the market reacted to the headline of OPEC+ discussing potentially delaying their planned oil output hike in October. Since then, prices corrected lower to $74.11/bbl by 11:40 BST (time of writing).
For all the market chatter about a disappointing summer for crude oil (flat price) and refined products, Dated Brent certainly did not get the memo.
The November Brent futures capitulated on Tuesday afternoon following the US open, falling from the $76/bbl level to $74/bbl within an hour, where it found better support. Prices fell to their lowest levels in nearly 9 months and were trading at $74.04/bbl at the time of writing (17:30 BST). Libyan Central Banker Sadiq Al-Kabir said that there were strong indications that a deal would be made between rival governments that would resume oil output, and this headline was a bearish catalyst for this afternoon’s sell-off.
The November Brent Futures contract has seen a weak morning, trading down from daily highs of around $77.53/bbl at 08:00 BST to $75.73/bbl at the time of writing (11:20 BST). In headlines, two tankers, the Panama-flagged Blue Lagoon I and the Saudi-flagged Amjad, were struck by attacks in the Red Sea, with the Houthis claiming responsibility only for the former, according to Reuters. Both tankers, which sustained no significant damage, were able to continue their routes, the Amjad has a capacity of up to 2 mb of crude, while the Blue Lagoon I can carry 1 mb. The US Central Command criticized the Houthis’ actions as destabilizing regional commerce and endangering maritime safety. This attack reflects a broader trend of the Houthis targeting vessels in the Bab al-Mandab strait since last November, initially focusing on Israeli and allied ships but expanding their targets. Meanwhile, Russia has reportedly complied with its OPEC+ oil production cut obligations as of August, Deputy Prime Minister Alexander Novak told Interfax, as the country aims to make up for overproduction in 1H’24 of around 500kbpd by the end of the year. Russia exceeded its OPEC+ quota by 67 kb/d in July, with the government attributing the excess output “to one-off problems with the supply schedule, while the levels in August and September should make amends for this.” At the time of writing, the Nov/Dec and Nov/May’25 Brent Futures spreads are at $0.62/bbl and $2.05/bbl, respectively.
Nov’24 Brent futures fl at price increased sharply this afternoon after a period of volatility, pricing at $76.80/bbl at 12:00 BSTand reaching $77.42/bbl at 17:50 BST (time of writing). In the news, Russian oil shipping costs to India are easing, attributedto build-up in Russia’s fl eet and general weakness in the freight market. For mid-September, the cost for a Russian tanker totransport 100,000 mt has dropped to $4.25-$4.5 million compared to $4.7-$4.9 million for the period July to August. In othernews, a Reuters survey showed that Saudi Arabia could reduce the price of its crude loading for Asia in October. Theirsignature crude grade, Arab Light, is expected to be priced $0.50 to $0.70/bbl lower than the September prices. The pricereduction comes as a result of weaker Dubai benchmark prices and decreasing refi nery margins across Asia. Finally, Libyahas declared force majeure on El-Feel oil fi eld, a legal clause allowing exports to be halted, amid a widening shutdown ofproduction across the country. The El-Feel fi eld in the southwest was pumping approximately 70 kb/d when in operation andthe nation’s total oil output has more than halved since last week. At the time of writing, the front month (Nov/Dec’24) andsix-month (Nov/May’25) Brent futures spreads are at $0.75/bbl and $2.38/bbl, respectively.
Nov’24 Brent futures flat price showed volatility this morning, rallying from $76.37/bbl at 07:00 BST to $77.18/bbl at 10:15 BST, before steeply declining to $76.80/bbl at 11:00 BST (time of writing). In the news today, Guyana raised their 2024 GDP growth estimate to 42.3%, following a surge in oil production offshore in the Stabroek block. In other news, further data has been published showing the weakening of China’s economy. Chinese manufacturing PMI has declined to 49.1 from 49.4, the National Bureau of Statistics said on Saturday, with factory activity in contraction for the fourth month in a row. In light of this, economists at banks including UBS and J.P. Morgan expect China will not reach its growth target of 5% for 2024. Finally, the oil depot fire in Russia’s Rostov region has been extinguished, two weeks after Ukraine’s latest drone attack on Russian energy infrastructure. At the time of writing, the front month (Nov/Dec’24) and six-month (Nov/May’25) Brent futures spreads are at $0.75/bbl and $2.38/bbl, respectively.
The Nov’24 Brent futures contract recorded a weaker afternoon ahead of Oct’24 Brent’s expiry today. The Nov’24 flat price dropped from $79/bbl at noon to $76.70/bbl at 15:00 BST. Prices found more support here and firmed up to $77.25/bbl at 17:25 BST (time of writing). OPEC+ is reportedly set to proceed with their planned increase in oil output from October, multiple sources from the producer group told Reuters. The plan includes an output boost of 180kb/d in October by eight OPEC+ members and is part of a larger plan to begin unwinding their recent layer of output cuts equalling 2.2mb/d while keeping other cuts in place until the end of 2025. In other news, a poll of 37 analysts and economists surveyed by Reuters over the past fortnight forecast that Brent futures would average $82.86/bbl in 2024 – recording a fourth cut in Reuters’ estimates (July: $83.66/bbl). In macroeconomic news, US consumer spending increased 0.5% in July’24 (prev: 0.3%) while the PCE, the Fed’s preferred measure of inflation, increased by 0.2% in July’24 (June: 0.2%), up 2.5% y/y. Finally, at the time of writing, the Nov/Dec’24 and Nov/May’25 Brent futures spreads stood at $0.80/bbl and $2.45/bbl, respectively.
Nov’24 Brent futures flat price was volatile this morning, strengthening from $79.14/bbl at 07:00 BST to a high of $79.49/bbl at 08:25 BST before declining to $78.81 at 11:20 BST (time of writing). In the news today, OPEC’s secretary general visited Baghdad, Iraq, securing assurance on full conformity with compensation cuts, which plan to reduce Iraq’s output to between 3.85-3.9 mb/d in September. In other news, Reuters confirmed this morning that no oil spill has been detected off the coast of Yemen, after an abandoned 274-metre-long oil tanker, containing around 1 mb, was attacked by Houthi rebels. An oil spill of this magnitude with 150,000 tonnes of crude would be more than half the size of the largest ever spill recorded from a ship, according to the International Tanker Owners Pollution Federation Limited (ITOPF). Finally, Shell has decided to cut 20% of its workers in oil and gas exploration units, focused in the US, Netherlands, and Britain. At the time of writing, the front month (Nov/Dec’24) and six-month (Nov/May’25) Brent futures spreads are at $0.87/bbl and $2.81/bbl, respectively.
Nov’24 Brent futures flat price rallied this afternoon, increasing from $77.72/bbl at 12:00 BST to a high of $79.55/bbl at 15:00 BST before coming to rest around $78.47/bbl at 17:45 BST (time of writing). In the news, Typhoon Shanshan hit Japan’s southwestern island of Kyushu, with three people reported dead and one missing, according to Bloomberg. The storm hit the city of Kagoshima at top speeds of 123mph and is heading towards the main island of Honshu, where the major port of Mizushima and multiple oil refineries are located. In other news, US Q2’24 GDP was revised up to 3% y/y, primarily driven by consumer spending. At the same time, US weekly jobless claims fell by 2,000 to 231,000 in the week ending 24 Aug against a Reuters poll forecasting 232,000 claims for this week. Lastly, Iraq plans to cut oil output to 3.85-3.9mb/d in September 2024, and cancelled a spot cargo of 1mb in August to reduce exports, a source told Reuters. At the time of writing, the front month (Nov/Dec’24) and six-month (Nov/May’25) Brent futures spreads are at $0.82/bbl and $2.63/bbl respectively.
In this week’s crude pendulum, we swung above $80 and back down again in a (co)sinusoidal fashion. Range trading seems to be the play here, and the trend-latching CTAs would have likely been well rewarded. The amount of outright managed money shorts in the main oil futures benchmarks is exceedingly high compared to historical levels, pressuring the long:short ratio of Brent futures down to levels last seen during Covid.
The October Brent Futures contract has seen a volatile morning, trading from $78.90/bbl around 08:45 BST to a low of $78.12/bbl at 10:00 BST before rallying back up to print at $78.68/bbl, at the time of writing (11:30 BST). In headlines, Libya’s oil production, which stood at 1.2 mb/d, was halted at several fields after the rival eastern government ordered a stop to all oil production and exports. This move deepened Libya’s political crisis, stemming from a dispute over the leadership of the Central Bank of Libya, the sole internationally recognized depository for the country’s oil revenues. Meanwhile, ONEOK, one of North America’s largest energy infrastructure operators, announced a $5.9 billion acquisition of stakes in two energy companies from Global Infrastructure Partners. ONEOK will acquire a 43% stake in EnLink Midstream for $3.3 billion and a stake in Medallion Midstream for $2.6 billion. This follows ONEOK’s $18.8 billion acquisition of Magellan Midstream Partners last year, further expanding its network of over 50,000 miles of pipelines. At the time of writing, the Oct/Nov and Oct/Apr’25 Brent Futures spreads are trading at $1.06/bbl and $3.39/bbl, respectively.
This afternoon, Nov’24 Brent futures flat price showed upward movement from $77.30/bbl at 12:00 BST to $77.90/bbl at 17:00 BST (time of writing). During this time, prices were volatile with a rally to $78.16/bbl, a marked decline to $77.36/bbl at 15:30 BST before climbing to a high of $78.49/bbl at 16:07 BST. After the release of EIA stats today at 15:30 BST, Oct WTI prices reacted positively, showing upward movement from $74.52/bbl to $75/bbl at 17:00 BST. Libyan oil output has now dropped to less than 600 kb/d after producing an average of 1.2mb for the past year, following a series of oilfield closures by the eastern government this month. According to Bloomberg, this production cut is a response to the Tripoli-based government’s attempt to replace the central bank’s leadership. With Libya exporting around 85% of its oil barrels to Europe in recent years, it is likely European refiners will turn to the U.S. and West Africa to replace the Libyan light sweet crude. In other news, the Rhine river’s falling water levels are severely restricting the cargo limits for barges heading to inland Europe, Bloomberg said. Water levels on the Rhine have dropped periodically in recent years, with the water level at Kaub expected to be as low as 108cm by Sep. 1. As a result, a barge which can normally haul as much as 2.5k mt of middle distillates is restricted to loading 1.36k mt if heading past Kaub. This could drop as low as 1.2k mt. Finally, the Nov/Dec and 6-month Nov/May Brent futures spreads are at $0.79/bbl and $2.60/bbl respectively.
This morning, the October Brent Futures contract has seen a steep decline from highs of $79.70/bbl at 07:55 BST down to $78.35/bbl at the time of writing (11:30 BST). In headlines, an oil depot in the Russia’s southern Rostov region was set ablaze in a Ukrainian drone strike, a retaliatory response to the Russian assault on Ukrainian energy infrastructure this Monday.
It was a paradigm shift in the Brent/Dubai crude market as the orderly downtrend in Brent/Dubai gave way to a mighty rally on 26 August following Brent’s rally on the Libyan supply disruption news. The Sep’24 Brent/Dubai widened from $0.30/bbl to highs of $0.90/bbl. Nonetheless, the complex is entering September pricing on a strong note, with the Sep/Oct Brent/Dubai box suppressed below -$0.30/bbl. In contrast, outright prices in the deferred have returned to previous highs above $1/bbl.
Despite the vanishing trading volumes amid 26 Aug’s UK public holiday, the beginning of the week has been anything but quiet in Brent futures.
The October Brent futures flat price suffered a setback on Tuesday afternoon as its sell-off accelerated following the US open. Price action fell from the $81/bbl level at 12:00 BST to lows of $79.63/bbl by 17:25 BST (time of writing). In line with this, Brent spreads weakened significantly, with Oct/Nov falling from $1.10/bbl to $0.90/bbl over the same time frame.
The October Brent Futures contract saw a weaker morning, trading from $81.60/bbl down to a daily low of $80.59 before rallying back up to $80.95/bbl, where it trades at the time of writing (11:20 BST). In headlines, Russia launched approximately 200 missiles at Ukraine on Monday, targeting energy installations and causing power and water outages in Kyiv.
Following a relatively quiet overnight session, the October Brent futures flat price spiked above $80/bbl on Monday morning, jumping by 70c in 20 minutes, trading at $80.50/bbl as of 11:20 BST (time of writing).
The October Brent futures flat price rallied into Friday afternoon, climbing by $1 from $78/bbl to the $79/bbl level by 17:00 BST (time of writing). Markets were buoyed by Fed Chair Jerome Powell’s comments, where he stated that “the time has come for policy to adjust”, which was interpreted as a dovish signal. However, the question remains about the amount of the cut (25bps or 50bps), and the upcoming non-farm payrolls report on 7 September may change the calculus. BP has acquired a stake in a Chinese sustainable jet fuel company (Zhejiang Jiaao Enprotech Stock Co.) for 350 million yuan ($49 million). China’s Rongsheng has purchased an Aframax-sized cargo of Canada’s Kearl Lake Blend crude, which is being transported via the TMX pipeline. The crude grade is set to arrive in China for the first time since 2018. Finally, the front (Oct/Nov) and 6-month (Oct/Apr) Brent futures spreads are at $0.85/bbl and $2.84/bbl respectively.
The Oct’24 Brent futures contract stood around $77.30/bbl early this morning before firming up to $78.05/bbl as of 10:55 BST. However, the contract met resistance here and softened to $77.85/bbl as of 11:15 BST (time of writing).
The Oct’24 Brent futures contract traded around a range of $76.20/bbl and $76.50/bbl between 13:00 BST and 14:45 BST before strengthening further into the afternoon, firming up to $77.55/bbl as of 17:10 BST (time of writing).
Alexa, play Down by Jay Sean. What goes up must come down, and our old friend Brent Futures is once again staring down at the abyss. The bullish EIA stats reading was the perfect dead cat bounce for longs to get the hell out of there, as the US job growth revision fuelled bearish sentiment. Brent found support at the $76/bbl handle, but this feels like déjà vu. Time and time again over the last two years, just when traders thought Brent would capitulate, it always managed to find the floor at the low $70s. But as the famous investment disclaimer goes, “Past performance is no guarantee of future results.” Indeed, the holy trinity of bearish sentiments provided a perfect cocktail this week. Concerns about a US slowdown, namely its labour market and China’s economic misfortunes, paint a bleak picture for demand. Combine this with OPEC’s musings of bringing back barrels in Q4, and it’s no wonder the bears are so gung-ho.
The October Brent Futures contract has seen strength this morning, trading from a low of $75.84 at 09:00 BST up to $76.26/bbl at the time of writing (11:20 BST). In headlines, Nigeria’s Dangote refinery plans to source more of its feedstock domestically for Q3, reducing U.S. crude intake. Previously, less than 75% of its crude came from domestic sources; In July, Dangote signalled a shift away from U.S. imports, cancelling two tenders for 6 mb of WTI for September, as reported by Bloomberg. Starting in October, the refinery will purchase up to 445 kb/d in local currency and once fully operational, will process 650 kb/d, making it one of the largest refineries globally. In other news, Mohsen Paknejad was appointed as the new oil minister for Iran, emphasizing the need to boost production amid limited fossil fuel reserves. Iran’s oil output increased by 20% in July, reaching 3.27 mb/d, however sanctions and technological challenges continue to hinder development and exports, with 70% of its gas reserves still trapped underground, according to Reuters. The Oct/Nov and Oct/Apr’25 Brent spreads are at $0.46/bbl and $2.10/bbl, respectively.
Oct’24 Brent futures flat price has seen pressure this afternoon, from over $77.70/bbl at 14.00 BST to $76.30/bbl at 17.30 BST (time of writing). The EIA US inventory report revealed a 4.649mb draw in crude stocks compared to the 2.2mb forecast and a 560kb draw in stocks at Cushing, OK. Gasoline saw a draw of 1.606mb. This is less than the 1.8mb forecast, although PADD 1B saw a 1.825mb draw. Distillates saw a larger than forecast draw of 3.312mb, a 2.312mb higher draw than forecast. Refinery utilisation has seen a second consecutive week increase more than predicted, as it rose by 0.8%. The US economy created 818,000 fewer jobs than initially reported in the 12 months to March 2024, according to the Labor Department. This 30% downward revision highlights a weaker labour market. The biggest adjustment was in professional and business services, with 358,000 fewer jobs than first estimated. OPEC+ has limited room to increase output without risking lower prices due to rising supply from the US, Brazil, and Guyana, according to BP’s Chief Economist. If OPEC+ restores output in October, global oil markets could shift from a deficit to a surplus, per IEA data. The Oct/Nov and Oct/Apr’25 Brent spreads are at $0.58/bbl and $2.10/bbl, respectively.
The October Brent futures flat price performed better on Wednesday morning, rising from the $77/bbl level to $77.60/bbl at 11:30 BST (time of writing). API inventory data was lacklustre, as US crude stocks indicated a +347kb build against expectations of a 2.7mb draw. The crude build was more significant than the draw in gasoline and distillates, as previous consecutive draws in US crude stocks contributed to the sustained backwardation in crude.
The chasm between the reality of demand sentiment and the crude oil futures markets, by extension, and the continued relentless buying in the North Sea physical seems to have been driven even wider this fortnight. Oct’24 EFP continues to price relatively weakly on partials, pointing to a squeeze in the physical rather than genuine demand. Fundamentally, margins continue to struggle with product weakness, although the lower flat price lent a touch of support.
The October Brent Futures contract experienced a mixed afternoon, trading sideways initially between $77.50/bbl and $77.85/bbl before rallying up to $78.30/bbl around 15:00 BST and experiencing a strong correction downwards to trade at $77.30/bbl at the time of writing (17:30 BST).
The October Brent Futures contract saw a recovery this morning, trading from the day’s low of $76.59/bbl at 09:30 BST up to $77.80/bbl, at the time of writing, 11:15 BST. In headlines, a major fire has continued into today at a Russian oil depot in the Rostov region, following a Ukrainian drone attack on the Kavkaz oil facility. The attack, 150 miles from the Ukrainian border, triggered a Russian air defense response, leading to drone debris striking the facility, with a governor of the southwest Russian region stating on Sunday that the drone ignited a diesel fuel fire at an industrial warehouse. Local media reported that at least 40 firefighters had been injured, with Ukrainian officials claiming responsibility, stating the depot supplied oil to the Russian military. In the U.S., former President Donald Trump, speaking in Pennsylvania, promised to cut energy costs by reversing federal policies if elected in 2024. He criticized Biden’s green energy initiatives and warned that if Kamala Harris wins, “energy costs would triple and quadruple,” and the U.S. would “not be producing a drop of oil.” Trump emphasized boosting U.S. oil production, referring to it as “liquid gold” and advocating for energy independence. The Oct/Nov and Oct/Apr’25 Brent Futures spreads also experienced some recovery following yesterday’s fall, trading at $0.55/bbl and $2.20/bbl respectively, at the time of writing.
Oct’24 Brent futures flat price rose to over $79.40/bbl at 14.00 BST before it was pressured to $77.96/bbl at 17.19 BST (time of writing). Secretary of State Antony Blinken arrived in Tel Aviv to push for a Gaza ceasefire, but Hamas accused Israel of undermining the effort. Netanyahu described his meeting with Blinken as “positive” and “conducted in good spirit.” Hezbollah claimed attacks on Israeli military sites, including Zabdin and Ramim barracks, and a missile strike near the Lebanon-Israel border. APA Corp is exploring the sale of oil and gas assets in the Permian Basin, valued at around $1 billion. The sale, managed by RBC Richardson Barr and Truist Securities, aligns with APA’s focus on shale production and debt reduction. The assets produce over 22,000 barrels of oil equivalent per day, with 60% being oil. Oil production in Libya’s Waha field has been restored to normal levels, of around 300kb/d. The Oct/Nov and Oct/Apr’25 Brent spreads are at $0.63/bbl and $2.25/bbl, respectively.
