Fuel Oil

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.