Our latest energy derivatives stories across the World.
See all the updates across the barrel in this week’s Onyx Commitment of Traders report, as well as six contracts to watch. Click on the relevant button below to access your COT report.
This report reviews the key data from the US EIA’s Weekly Petroleum Status Report
The Jan’25 Brent future is trading near recent bottoms, with a wedge forming with lower highs from early October and a quite weak momentum in the bear trend shown by a negative but small MACD differential. We anticipate a short
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This report covers the correlation in daily returns (on different rolling window periods) between the main energy contracts listed on the ICE and NYMEX exchange and the S&P 500 and the DXY dollar index.
This report reviews the key data from the US EIA’s Weekly Petroleum Status Report
The report covers oil inventory data in the OECD held by industry in million barrels and days of forward demand, as provided by the International Energy Agency
See all the updates across the barrel in this week’s Onyx Commitment of Traders report, as well as six contracts to watch amid a market desperately seeking direction. Click on the relevant button below to access your COT report.
Onyx’s in-house CTA positioning model determines the net positioning of CTAs in a range of futures benchmarks. The week ending 28 Oct saw a relatively small increase in positioning across the major oil futures benchmarks. Net positioning reached lows of -101k lots on 22 Oct before rising to -806k lots by 28 Oct. The trends were in line with the relatively rangebound flat prices of the futures conctracts, where their 20-day moving averages had generally flattened. Heating Oil currently sees the most bullish positioning at -14k, replacing WTI from the week previous, whilst RBOB gasoline holds the most bearish positioning, at -19.7k lots, replacing gasoil.
Since early November, the Jan’25 Brent crude futures contract has traded in a narrow range, between $73.50 and $76.00/bbl, with prices settling at $72.80/bbl as of 12:00 GMT on 11 November (time of writing). On US election day, 5 Nov,
This report reviews weekly oil inventory data from the US EIA’s Weekly Petroleum Status Report, Global Insights’ ARA Independent Storage and International Enterprise’s Singapore product storage
This report covers the correlation in daily returns (on different rolling window periods) between the main energy contracts listed on the ICE and NYMEX exchange and the S&P 500 and the DXY dollar index.
Brent crude futures saw a relatively rangebound week, with prices in the Jan’25 contract trading between $74 and $76/bbl. Oil’s reaction to the US election result was subdued, where the ‘Trump trade’ was focused on other risk assets, including equities,
See all the updates across the barrel in this week’s Onyx Commitment of Traders report, as well as six contracts to watch for the week ahead. Click on the relevant button below to access your COT report.
This report reviews the key data from the US EIA’s Weekly Petroleum Status Report
Onyx’s in-house CTA positioning model determines the net positioning of CTAs in a range of futures benchmarks. The week ending 28 Oct saw a relatively small increase in positioning across the major oil futures benchmarks. Net positioning reached lows of -101k lots on 22 Oct before rising to -806k lots by 28 Oct. The trends were in line with the relatively rangebound flat prices of the futures conctracts, where their 20-day moving averages had generally flattened. Heating Oil currently sees the most bullish positioning at -14k, replacing WTI from the week previous, whilst RBOB gasoline holds the most bearish positioning, at -19.7k lots, replacing gasoil.
Brent crude futures have been trading higher at the start of November, with prices in the Jan’25 contract trading above $74/bbl as of Monday morning. Price action was supported as market participants remain on edge over the conflict in the
This report covers the correlation in daily returns (on different rolling window periods) between the main energy contracts listed on the ICE and NYMEX exchange and the S&P 500 and the DXY dollar index.
The Risk Premium Rises (Again) On Monday, we held a bearish view of the Jan’24 Brent futures contract and forecast it to end the week between $68-71/bbl. While the futures contract did weaken to an intraday low of $70.28/bbl on
This report reviews weekly oil inventory data from the US EIA’s Weekly Petroleum Status Report, Global Insights’ ARA Independent Storage and International Enterprise’s Singapore product storage
See all the updates across the barrel in this week’s Onyx Commitment of Traders report, as well as six contracts to watch for the week ahead. Click on the relevant button below to access your COT report.
This report reviews the key data from the US EIA’s Weekly Petroleum Status Report
The Market Resets Oil prices finally saw a cooling of the geopolitical risk premia tied to fears of an Israeli attack on Iranian oil and nuclear infrastructure, with the soon-to-be-prompt Jan’25 Brent futures contract falling from a close of $75.62/bbl
Onyx’s in-house CTA positioning model determines the net positioning of CTAs in a range of futures benchmarks. The week ending 28 Oct saw a relatively small increase in positioning across the major oil futures benchmarks. Net positioning reached lows of -101k lots on 22 Oct before rising to -806k lots by 28 Oct. The trends were in line with the relatively rangebound flat prices of the futures conctracts, where their 20-day moving averages had generally flattened. Heating Oil currently sees the most bullish positioning at -14k, replacing WTI from the week previous, whilst RBOB gasoline holds the most bearish positioning, at -19.7k lots, replacing gasoil.
This report covers the correlation in daily returns (on different rolling window periods) between the main energy contracts listed on the ICE and NYMEX exchange and the S&P 500 and the DXY dollar index.
This report reviews weekly oil inventory data from the US EIA’s Weekly Petroleum Status Report, Global Insights’ ARA Independent Storage and International Enterprise’s Singapore product storage
See all the updates across the barrel in this week’s Onyx Commitment of Traders report, as well as six contracts to watch for the week ahead. Click on the relevant button below to access your COT report.
This report reviews the key data from the US EIA’s Weekly Petroleum Status Report
Geopolitical risk: down but not out We see a firm Brent complex this week. We forecast Dec’24 Brent futures to end the week in the mid-70s, and we anticipate a ceiling of around $78, and $73/bbl acting as a floor.
Onyx’s in-house CTA positioning model determines the net positioning of CTAs in a range of futures benchmarks, employing a trend following model that uses price data and realized volatility. The week ending 08 Oct saw CTA positioning pick up significantly, after remaining relatively flat for the previous week. There was a net increase of nearly 106mb in combined futures between 01 and 07 Oct, with the rate of growth in CTA positioning slightly slowing towards the end of the week. In crude, we saw net positioning in Brent increase from -37.2mb to -10mb, the largest jump in CTA net positioning across all futures contracts for the week to 08 Oct. Meanwhile, WTI showed a similar pattern, increasing from around -32.1mb to just under -9.7mb over the week. The product’s net positioning all recovered after falling the previous week, including RBOB with the lowest net positioning, increasing from -43.4mb up to -24.1mb by 08 Oct.
This report compares and contrasts the Bloomberg survey of ICE Brent and NYMEX WTI forecast to their high/low range as well the forward curve
This report covers the correlation in daily returns (on different rolling window periods) between the main energy contracts listed on the ICE and NYMEX exchange and the S&P 500 and the DXY dollar index.
This report reviews weekly oil inventory data from the US EIA’s Weekly Petroleum Status Report, Global Insights’ ARA Independent Storage and International Enterprise’s Singapore product storage
The Dec’24 Brent crude futures contract cratered by $3 overnight Monday (14 Oct) from around $77.50/bbl to $74.50/bbl, before trading rangebound for the remainder of the week between $74/bbl and $75/bbl. Prices are set for their biggest weekly decline since
This report reviews the key data from the US EIA’s Weekly Petroleum Status Report
This morning, Brent flat price went higher, why? Was it a delayed EIA data reaction or better demand signals from Asia or just a market that has been tired of going down. We share that some of us, think we could $75.00/bbl. We also expect a much higher demand for gasoline during the Thanksgiving period amounting to 1.3 more trips than last year. And also more flying. We will verify the data in two more weeks. By 11:30 GMT, Brent surpassed $74, beyond yesterday’s peaks. WTI lagged slightly and struggled to break above its highs yesterday but it did exceed $70 again. The weekly EIA report was more bullish than first glance may have suggested. PADD3 crude stocks fell by 4 mb, a big 1.18 mb/d increase in imports and a 110 kb draw on distillate stocks. Forget gasoline now driving season is well in the rearview mirror and focus on distillates instead. Cushing is still bone dry and saw another 140 kb draw.
In addition to our regular Monday CFTC COT analysis report, Onyx Insight will publish its own in-house CFTC COT forecast ahead of the official Friday report. The model forecasts changes in long and short positions using machine learning, utilising Onyx’s proprietary data.
The Jan’25 Brent futures contract saw sustained strength this morning, increasing from $73.25/bbl at 07:00 GMT up to $73.95/bbl at 10:55 GMT (time of writing). Geopolitical risk was elevated as Russia fired an intercontinental ballistic missile at the southern city of Dnipro, Ukraine for the first time since the start of the conflict in 2022, according to Financial Times. In the news today, US President-elect Donald Trump intends to revive the construction of the Keystone XL pipeline on his first day in office. The 1,200-mile-long pipeline was supposed to carry some 800kb/d of Canadian heavy crude to US refineries. In other news, Exxon has decided to pull out of an exploration block offshore Suriname and transfer its 50% stake to Petronas, as stated by Suriname state-owned company Staatsolie. Finally, Exxon, Hess, and CNOOC plan to add a fourth production vessel in the Stabroek Block offshore Guyana, according to Hess Corp.’s CEO quoted by Reuters. The new facility is expected to add 250kb/d to the group’s output capacity by 2026. At the time of writing, the Jan/Feb’25 and Jan/Jul’25 Brent futures spreads stand at $0.35/bbl and $1.29/bbl, respectively.
In the North Sea window today, Totsa just couldn’t help itself. Just one more… and again it’s Unipec facilitating, as in the Dubai window. France against China, hmm. We will watch! Totsa bought a 10-14 Dec Midland from the Chinese at Dated +$2.10. Exactly the same deal as they struck last night, to the date and to the cent. Unipec clearly knows how Totsa likes it! And, once again, Equinor is desperate to offload its Johan Sverdrup, offering a 1-3 Dec cargo at Dated -$2.75 after not getting any interest at Dated -$2.60 yesterday. Trafi also came in and bought a Forties from BP for 12-14 Dec at $1.15 over Dated.
The Jan’25 Brent futures contract declined this afternoon after initial strength, moving from $73.60/bbl at 12:00 GMT up to $73.93/bbl at 14:00 GMT, before falling to $72.90/bbl at 17:40 GMT (time of writing). Crude oil prices fell to the $73/bbl support level just after 15:30 GMT today amid the release of EIA data, which showed a build of 545kb in US crude oil inventories for the week to 15 Nov. In the news today, Ukraine has fired UK-made Storm Shadow missiles at targets inside Russia, a day after using the US ATACMS, as per Reuters. In other news, Nigeria’s Dangote refinery has purchased its first shipment of US oil after a hiatus of three months, according to a Bloomberg report. The plant purchased about 2mb of WTI Midland from Chevron, due to be delivered next month to the refinery near Lagos. Finally, the Iraq’s Ministry of Foreign Affairs has asked Iranian authorities to stop trucks carrying “oil, black oil and other petroleum products” through the border crossing areas in Iraq’s semi-autonomous Kurdistan region unless exports are licensed by SOMO, according to a 12 November letter seen by Argus. At the time of writing, the Jan/Feb’25 and Jan/Jul’25 Brent futures spreads stand at $0.31/bbl and $1.11/bbl, respectively.
Middle Eastern propane (C3 CP) drove bullish sentiment in the propane market as CP attracted sticky buying despite lower crude. This was aided by a strong CP settlement and improved demand from India during its festival season. As a result, the front Dec/Jan spread rose to $10/mt over the fortnight. In line with this, the FEI/CP was heavily pressured as the Dec’24 FEI/CP spread fell from $10/mt to lows of -$12/mt, with rising freight rates a contributing factor.
Totsa, the European hungry man! He’s going to explode at this pace eating up PG barrels and also North Sea! It was “a one man show!” during the window, according to traders. What are they doing with all this stuff? Tea Pots, say our sources but there was even a rumour of a PG cargo going to Europe. ‘But we are over the winter demand hump, we are buying February to refine in March,’ said a Singapore-based trader. March is typically one of the low months in demand due to turnarounds.
The Jan’25 Brent futures contract rose this morning from $73.30/bbl at 07:00 GMT up to a high of $73.92/bbl at 09:20 GMT, before falling back down to $73.50/bbl at 10:40 GMT (time of writing). This morning, a Reuters report citing Kpler vessel-tracking data showed that China’s crude imports are on track to end November at or close to record highs, however, no exact figure was specified. Meanwhile, markets forecast a 0.8mb in US crude oil inventories, with EIA data due to be released at 15:30 GMT today for the week to 15 Nov. In the news today, around 10,900 North Korean troops have been deployed to the Kursk region as part of Russia’s airborne unit and marines, in addition to shipping arms for the war in Ukraine, according to a South Korean lawmaker Lee Seong-kweun citing the National Intelligence Service. In other news, the acting Minister of Natural Resources in the Kurdistan Regional Government (KRG), Kamal Mohammad Salih, stated that Kurdistan’s oil exports will resume at the beginning of 2025 with barrel extraction costs set at $16, as per an article by Kurdistan24. This followed an agreement between the KRG and the central Iraqi government on a new production-sharing framework. At the time of writing, the Jan/Feb’25 and Jan/Jul’25 Brent futures spreads stand at $0.32/bbl and $1.05/bbl, respectively.
Totsa just can’t get enough. The French grabbed three more cargoes in this afternoon’s North Sea window! And all that after accumulating 13 convergences in Dubai so far this month. There’s no sating the French appetite. In today’s North Sea window, Totsa took a 10-14 Dec Midland from Unipec at Dated +$2.10, a 9-11 Dec Forties from BP at $1.15 over Dated and put Equinor out of its misery, lifting an 11-13 Dec JS once the Norwegians had lowered it down to Dated -$2.35! Once that was lifted, Equinor immediately withdrew its 1-3 Dec and 6-8 Dec JS offers. By the way, the Johan Sverdrup field is still operating at only 2/3 capacity, and Equinor hasn’t a clue when it will be back to full operation. Totsa’s gluttony for crude meets Equinor’s desperation to get rid of it and makes for a match made in heaven.
Over the past week, the Dated Brent market has been undoubtedly bullish as physical differentials rose from 34c on 11 Nov to 110c on 18 Nov. There has been strong bidding in the physical windows with Petroineos a big bidder last week; Total was also big on the buy side. Today, I bought three grades; Trafi has been bidding here and there. On the sell-side, BP has been offering, and Unipec is also selling. There has been bidding for Midland and Forties at the front of the curve which has supported the diff. Midland has been offered further down the curve, now setting the curve. There was some Forties bidding at the back earlier in the week, but this was not maintained.
The Jan’25 Brent futures contract strengthened this afternoon from $72.95/bbl at 12:00 GMT up to $73.35/bbl at 17:45 GMT (time of writing). Crude prices were volatile this afternoon, rising to $73.85/bbl at 15:25 GMT and steeply selling off to $72.85/bbl by 15:30 GMT, amid news that Iran agreed to stop producing near bomb-grade uranium, according to Bloomberg. Prices recovered amid ongoing concerns regarding North Sea production outages and escalation of the Russia-Ukraine conflict. In the news today, Russian crude oil shipments dipped to a two-month low in the four weeks to 17 November, as loading from Russia’s Western ports decreased, as per tanker-tracking data compiled by Bloomberg. In other news, Nigeria’s Dangote refinery is looking to buy WTI Midland for December arrival with a cargo size of 1-2mb, to be delivered to the Lekki plant near Lagos. In addition, data by Vortexa and Kpler revealed that a tanker has hauled more than 300kb of gasoline from the Dangote plant to waters of Togo, a potential sign that more volume could enter regional markets. At the time of writing, the Jan/Feb’25 and Jan/Jul’25 Brent futures spreads stand at $0.25/bbl and $1.00/bbl, respectively.
The naphtha market has struggled over the past two weeks, with poor performance observed across both European and Asian complexes. We saw flows primarily skewed towards the sell-side, with trade houses and refiners being key sellers in the NWE crack and the E/W naphtha differential. However, a surge in trade house buying activity in the front-month NWE spread has emerged, despite recent weakness. It remains to be seen if this buying will persist and whether it can provide much-needed support for prompt NWE naphtha in the coming weeks. Adding to this dynamic, the second half of 2024 brings anticipated cracker closures in Europe and startups in China, suggesting weaker demand in the West as demand potentially strengthens in the East.
November continues to be a lacklustre month in the Brent/Dubai complex as market participants gradually retreat and become more risk-off leading up to Christmas. Glance no further at open interest levels where market risk is focused in the front tenors (Nov’24, Dec’24, Jan’25), which have plateaued and declined recently. In contrast, open interest in the deferred contracts is roughly in line with their 5-year average. Reaction to fundamental news has been lacking, which has instead been focused on Brent. Perhaps some normality is much needed after a whirlwind couple of years.
Another week brings another selection of new trade ideas from Onyx Research, this time looking at trades in gasoline swaps. Our weekly Onyx Alpha report presents speculative and hedging trades based on technical analysis and data-driven tradecraft methods on Onyx Commitment of Traders (COT) and Flux Financials data.
Today was a cornucopia of convergences! 7 in fact! 3 more to Totsa, 3 to PetroChina and Equinor collecting the last one. Vitol’s strong showing on the sellside brought a convergence to Totsa, for an Oman, while the French also received Upper Zakums from Unipec and Exxon too. Totsa’s got 13 convergences already in November. Oh boy, they are hungry! Light work for a major with such a huge appetite! The waiter just can’t keep up, bringing platter after platter to the ravenous patron. Meanwhile, PetroChina collected three Upper Zakums, from compatriots Shenghong and Unipec, as well as Phillips. As the cherry on the convergence cake, Exxon declared an Al Shaheen to Equinor.
The Jan’25 Brent futures contract saw weakness this morning, decreasing from $73.35/bbl at 07:00 GMT to $72.70/bbl at 09:30 GMT, before recovering slightly to $73.10/bbl at 11:00 GMT (time of writing). Crude oil prices dipped this morning as Lebanon and Hezbollah have agreed to a US ceasefire proposal, requiring Hezbollah to have no armed presence in the area between the Lebanese-Israeli border and the Litani River. Furthermore, production at Norway’s Johan Sverdrup is back online after an onshore power outage, with Johan Sverdrup reportedly operating at two-thirds of its 755kb/d capacity, as per Reuters. In the news today, Ukraine carried out their first strike in a border region within Russian territory using a US missile, according to a Bloomberg report. This Ukrainian attack utilised American-made Army Tactical Missile Systems (ATACMS), manufactured by Lockheed Martin, with a range of about 300km. In other news, India’s oil products demand growth in October saw an almost 3% rise y/y as monsoon season ended, a trend that is set to continue in November due to higher vehicle sales during the festival period and agricultural demand, according to S&P Global. Meanwhile, Petrobras aims to boost spending on new oil drilling by almost 9% to $111 billion in their 2025-2029 plan, reported by Bloomberg. The plan awaits approval from Petrobras’ board of directors and is scheduled to be released on 21 Nov. Finally, after the EU and the UK imposed sanctions on Iran yesterday for allegedly sending UAVs and missiles to Russia, including freezing the assets of the Islamic Republic of Iran Shipping Line (IRISL), Iran’s Ministry of Foreign Affairs spokesman Esmail Baghaei has condemned the sanctions as affecting the “fundamental rights and interests of Iranians”. At the time of writing, the Jan/Feb’25 and Jan/Jul’25 Brent futures spreads stand at $0.27/bbl and $1.09/bbl, respectively.
In the week ending 12 November, money managers added length to their positions in both Brent and WTI crude futures. Following Donald Trump’s election victory, we saw Hurricane Rafael divert course from the US Gulf Coast, leaving oil infrastructure unscathed, while weak Chinese oil demand continued to put pressure on the market. Managed-by-money players added 14.5mb (+3.6%) w/w and 42.8mb (29.3%) to their long and short positions, respectively. As a result, overall net positioning across Brent and WTI futures decreased by 27mb (-10.5%) w/w, bringing money managers long:short ratio to 2.27:1.00 compared to 2.83:1.00 for the week to 05 November
The oil market continues to be in consolidatory wait-and-see mode regarding the gap between the “drill baby drill” campaign rhetoric and actual change to the physical crude supply from the US. The lack of meaningful price movement has been clear, and open interest in the Jan’25 contract continues to uniformly drop. The prompt has been supported from trading near recent bottoms and we have seen lower highs all month, forming a wedge. As volatility is not low, Bollinger bands are not narrowing; we may need to see greater consolidation before there is a significant breakout from between the 20-day moving average and the lower Bollinger band.
Panic stations! All production at Johan Sverdrup is offline due to smoky electrical wiring at an onshore power converter station, according to our call with their spokesperson. That makes for 755 kb/d of oil equivalent out of action. Equinor also stated it is too soon to say when the field will be back up and running. At least they pinky promised they were working on the issue. They certainly should be: according to our calculations, given today’s prices, that lost production will cost Equinor over $50 million per day. Brent flat price seized the opportunity to make a break for it and surged up beyond $73 through the afternoon. It held onto those gains through the Trafi-dominated window to end the European session at $73.15/bbl, just over a buck up from Friday. And all that just as Equinor proudly announced discovery of North Sea oil and gas deposits near the Troll field on Thursday.
The Jan’25 Brent Futures rallied this afternoon, rising from $71.44/bbl at 12:00 GMT to $73.27/bbl by 16:20 GMT before encountering resistance and retracing slightly to $73/bbl as of 17:15 GMT. In headlines, news of a power outage halting output at Equinor’s Johan Sverdrup oilfield, western Europe’s largest, with a capacity of 750 kb/d has emerged, contributing to the rally in flat price. In other news, Saudi Arabia’s crude exports rose by 80 kb/d in September to 5.75 mb/d, the highest in three months, as direct crude burning for power generation fell sharply (-296 kb/d to 518 kb/d) with the end of the summer peak. Oil production dipped slightly by 17 kb/d to 8.98 mb/d, while refinery runs hit a four-month high of 2.756 mb/d, up by 35 kb/d, according to JODI data. In other news, global natural gas demand rose by 6.1 billion cubic metres (bcm) year-over-year in September, with production increasing by 7.65 bcm, driven by Russia, the U.S., Nigeria, Norway, Canada, and Azerbaijan, according to JODI’s latest data. Inventories reached a record 251 bcm, 12.6 bcm above the five-year average, after rising by 9.9 bcm in September as countries stockpiled ahead of winter. At the time of writing, the Jan/Feb’25 and Jan/Jul’25 Brent futures spreads stand at $0.27/bbl and $1.09/bbl, respectively.
The $3.6 billion Singapore oil fraud saga committed by O.K. Lim is playing out its last scenes. It’s curtains really as OK Lim is sentenced to 17.5 years in prison for committing the biggest trading fraud ever perpetrated in the island state. Naughty, naughty. For an 82-year-old, that’s effectively a life sentence in the most literal sense. The presiding judge gave no concession for Lim’s medical conditions and age and said that a “deterrent” sentence was justified and necessary. Fudging the numbers here and there to hide losses can come with a hefty price tag. Due to our experience in the oil market, we knew OK and his son and others in his management team fairly well. They seemed to have more money than the bankers and at some point, I published a list of the banks giving his company LCs. The banks and traders were surprised at the web of interlinks. We are also following the nickel fraud case where the fraudster ensnared some of the top folks in Singapore.
After selling-off on Friday afternoon, the Jan’25 Brent futures contract saw strength this morning, trading at $71.30/bbl at 07:00 GMT and rising to $71.55/bbl around 10:40 GMT (time of writing). Geopolitical risk has been elevated with US President Biden now allowing Ukraine to use US-made weapons to strike deep into Russia, and Ukraine expected to launch its first long-range attack in the coming days, as per Reuters. In the news today, China’s crude oil surplus shrank from 930kb/d in September to 500kb/d in October, according to data compiled by Reuters. Meanwhile, China’s gasoline exports were at 180kb/d in October, their lowest level since April and down 13% y/y, as per Bloomberg. In other news, Donald Trump has nominated Chris Wright, chief executive of Liberty Energy, to lead the US Department of Energy during his administration. Wright previously stated in a 2022 Bloomberg interview that “three decades from now the vast majority of energy will come from hydrocarbons”. Finally, a Bloomberg poll showed that economists expect Germany’s GDP to contract by 0.1% in 2024, after a 0.3% fall in 2023. At the time of writing, the Jan/Feb’25 and Jan/Jul’25 Brent futures spreads stand at $0.27/bbl and $0.93/bbl, respectively.
Markets are getting tired. The stock market is down and oil’s flirting down near the $71.00/bbl market. And the biggest shiny thing of all, lasting gold, is heading toward $2,500 an ounce. Where to find refuge? Well, where people are in conflict and sadly the Russians and Europeans are at it again with an Austrian court trying to punish Russia’s Gazprom. As Batman surely wants to tell Putin, Wham, Bam, Pow. But who is the poor victim? The European consumer, as Russia says, no gas for you! 😊 And prices rise over ten percent. Don’t go into a gun fight with a pocketknife, the baddies told me in Britain. This week’s been chaotic in flat price. Brent is keeping us alert with constant ducking and diving. Monday’s dump of over $2 put us deeply back into the low 70s and cast a shadow over the week. It still feels heavy. A plunge on Wednesday and a bumpy ride yesterday and today tell us the price yearns for a 60 handle. It’s a matter of time. Today’s final surge stalled at $72.30/bbl and Brent closed the European trading week at $72.14/bbl. A post-window dump had prices down to $71/bbl by 18:00 GMT.
The Jan’25 Brent futures contract declined this afternoon from $72.35/bbl at 12:00 GMT down to $71.00/bbl at 18:00 GMT (time of writing). We have seen bearish sentiment in Brent crude while China oil demand remains weak and Middle East ceasefire talks develop, with senior Iranian official Ali Larjani stating today that Iran backs any decision taken by Lebanon in securing a peace deal with Israel. In the news today, at least three Russian refineries, Tuapse, Ilsky and Novoshakhtinsky, have halted processing or cut runs due to heavy losses, according to Reuters, with these facilities struggling amid export curbs, high borrowing costs, and Ukrainian drone attacks. In other news, Sovcomflot reported a 22.2% y/y drop in nine-month revenue to $1.22 billion, claiming that the Western sanctions on Russian oil tankers limited its financial performance. Finally, according to a Bloomberg report, the selling pace of Angolan oil for December-loading is slower than usual, with about a third of the shipments still seeking buyers. At the time of writing, the Jan/Feb’25 and Jan/Jul’25 Brent futures spreads stand at $0.28/bbl and $0.94/bbl, respectively.
In High Sulfur Fuel Oil (HSFO), the 3.5% bgs and Sing 380 contracts saw a strong rally in the past two weeks, with the strength in the East exceeding that of its European counterpart, with the Dec’24 E/W rallying from $4.00/mt on 1 Nov to highs of $15.00/mt on 13 Nov. The European and Asian HSFO cracks have started to soften from highs, which reached 13 Nov, with some heavier selling from trade houses. There has been more action in the Visco markets, with the outright Dec’24 visco sold into by trade houses and the 180 markets better offered.
It’s convergence week! Totsa just can’t get enough. It gained yet another four convergences today: an Upper Zakum from each of Exxon and PTT, an Al Shaheen from Trafi and an Oman from Phillips. At least we’ve finally broken free of the Upper Zakums and got some variety in the grades being declared. Totsa just hasn’t been able to restrain itself this month. Le rampaging Totsa Taureau threw down his cigarette and baguette and came to try to save the tumbling physical premium this week, bidding and lifting all over the place. Look at how many convergences it’s got! 10! That’s 5 million barrels. Enough to keep France going for days! But rumour has it they’re taking it East anyway…
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.
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.
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.
Prices just can’t decide between up or down. So, they do both. Up, then back down again. It’s more fun that way. It keeps us guessing. Overall, though, the line of travel is clear. The downward plunge this afternoon was briefly interrupted by the EIA’s stocks report showing a chunky draw on gasoline stocks, but quickly regathered for another dive. The fall continued even after the close at $72.40/bbl, to quickly wipe out the daily settlement change, with some interest. Before 18:00 GMT we were troubling $72.
Oil demand over estimation by international bean and barrel counting organizations continues unabated. Yesterday it was OPEC’s turn to say China’s demand was growing by 450 kb/d, today it’s the IEA. Can anyone admit they got it wrong and make a large correction to account for China’s oil product consumption contraction? Well, it appears not. We are small and armed not only with conviction but also with data. As our wall says in our refurbished gigs, ‘without data, you are just another person with an opinion.’ China’s oil consumption has fallen out of bed and all our sources are reporting close to 1 million bbls contraction in gasoline and diesel. We feel so strongly about this we sent letters to major international organisations to alert them of the change which, by the way, didn’t happen overnight. We’re monitoring the reaction and holding our breath. Wish us luck. 😱
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.
In addition to our regular Monday CFTC COT analysis report, Onyx Insight will publish its own in-house CFTC COT forecast ahead of the official Friday report. The model forecasts changes in long and short positions using machine learning, utilising Onyx’s proprietary data.
It’s breathless. Frantic. Prices are up, then down, then up. But prices are going nowhere. We briefly broke under the $71 floor this afternoon, but flat price quickly recovered. Lennie saw the rise in the European morning and was convinced a rally was on the cards. But then it tumbled again when Team America didn’t like such a high price tag but rose through the window. Lennie just can’t catch a break! After all that excitement, Brent closed the European session at $72.17/bbl once cent down from yesterday. OMG, we need to lie down.
