Our latest energy derivatives stories across the World.
The Jan’25 Brent futures contract concluded last week on a solid note, closing at $75.20/bbl on 22 Nov off the back of escalating tension around the Ukraine war. Prices softened to $74.35/bbl this morning, where they found support briefly, but
Onyx’s in-house CTA positioning model determines the net positioning of CTAs in a range of futures benchmarks. The week ending 25 Nov saw increasing bullish sentiment as net positioning increased across the major oil futures benchmarks. Total net positioning rose from -118k on 18 Nov to -52k by 25 Nov, the highest level since 16 Oct, with middle distillates leading the way. The product with the most bullish positioning is now ICE gasoil, which surpassed Heating Oil on 18 Nov and rose to -4k by 25 Nov. The lower net positions are shared by RBOB, Brent, and WTI. Overall net positioning has struggled in the second half of this year and has not been positive since mid-July. It remains to be seen if the current increase in bullish positioning can be sustained.
Click below to explore our new Refinery Margins Report, offering a clear, detailed analysis of weekly and monthly shifts in key regional refinery margins. This report enables readers to pinpoint where margins are tightening or loosening across regions, drawing on proprietary yields and our leading market share in swaps to build a world class financial refinery margin—essential for understanding the evolving landscape of regional refinery economics.
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.
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
Click below to explore our new Refinery Margins Report, offering a clear, detailed analysis of weekly and monthly shifts in key regional refinery margins. This report enables readers to pinpoint where margins are tightening or loosening across regions, drawing on proprietary yields and our leading market share in swaps to build a world class financial refinery margin—essential for understanding the evolving landscape of regional refinery economics.
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
$75 came and went. News that Netanyahu had agreed to a ceasefire with Hezbollah sent flat price tumbling towards the $73/bbl level after 13:30 GMT. Front-month Brent futures shed $1.53/bbl in the immediate aftermath. The erosion of Middle East geopolitical risk returns Brent flat price to the $73 handle, leaving the bearish fundamentals in control. And from the supply side, the outlook continues to look more bearish. Bessent’s nomination as Treasury Secretary means a lot of things, but crucially, it means more oil flowing out of the US. Get your raincoat, it’s going to rain, not water but oil. OPEC is breaking apart with more indications of the UAE at 3.85 mil b/d production. Who are they kidding with their pretend numbers? In fact, the new money bags man is looking to boost the US’s crude output by 3 mil b/d. If he sets the right conditions, yes, but don’t forget it is a free market there. Then we also got news today that Iran would not adhere to production quotas and would continue to chase its 4 mil b/d goal.
The Jan’25 Brent futures contract declined this afternoon from $75.15/bbl at 12:00 GMT down to around $73.10/bbl at 17:40 GMT (time of writing). Bearish sentiment prevailed this afternoon while markets turned focus to talks of an Israel-Hezbollah ceasefire. A senior Israeli official said today that Israel’s cabinet would meet on Tuesday to approve a ceasefire deal with Hezbollah, according to Reuters. Meanwhile, a senior US official told Axios today that both Israel and Lebanon agreed to the terms of a ceasefire agreement with a 60-day transition period during which the Israeli military would withdraw from southern Lebanon. In other news, a Reuters report stated that incoming US President Trump is drafting an energy package to expand domestic oil and gas drilling, in addition to expediting LNG export permits. Finally, Kazakhstan could increase its crude oil exports out of Turkey’s port of Ceyhan, with Kazakhstan’s Energy Minister Almasadam Satkaliyev claiming exports via the Baku-Tbilisi-Ceyhan (BTC) pipeline could increase to 20 million metric tons a year from the current 1.5 million, not specifying an exact time frame. At the time of writing, the Jan/Feb’25 and Jan/Jul’25 Brent futures spreads stand at $0.57/bbl and $1.74/bbl, respectively.
After a rangebound start to the week in Brent futures, we saw steady strength as the Jan’25 contract rose from an intraday low of $71.10/bbl on 18 Nov to an intraday high of $74.65/bbl on 22 Nov. Among several bullish and bearish drivers, markets refocused on brewing geopolitical risk in the Russia-Ukraine conflict in particular, with Ukraine firing the US-made ATACMS and UK-made Storm Shadow directly into Russian territory for the first time since the start of the war. This week, Bollinger bands in the Jan’25 contract have narrowed marginally, while open interest continued to drop since its 31 Oct peak of 570mb, now at 311mb as of 21 Nov. We have yet to see a clear directional axe in the market, perhaps as traders await more concrete signs of any potential supply disruption that further escalations in the Russia-Ukraine conflict may bring.
Netanyahu has just agreed to a ceasefire with Hezbollah! But the big news doesn’t stop there. Pay attention to China too! China has issued extra 8.04 million metric tons (around 160.8 thousand barrel per day) of extra crude import quotas to independent refiners for late 2024. This equates to close to 60 million bbls of extra crude imports!!! The rumor mill has been awash with indications that Totsa was buying crude in the window on behalf of Hengli, one of the independent refiners, AKA teapots. Hengli got an extra 14.5 mil bbls allocation so it makes sense. It would also make sense that somebody knew something in advance And Totsa has bought 13.5 million barrels so far this month in the window! We just put numbers together. Har har har
In the week ending 19 November, there was a consolidation of the long:short ratios for money managers in Brent and WTI. This is the first time since May that the Brent funds’ long:short ratio surpassed WTI’s. The combined positions showed a small net change in both long and short positions, as money managers took opposing net positions in both contracts. Meanwhile, money managers added length to their ICE LS gasoil futures positions at the fastest rate since June as net positioning turned positive for the first time since the week ending 30 July. European gasoil fundamentals have improved, and the recent rally has been exacerbated by overcrowding of short positions.
The Jan’25 Brent futures contract has softened from $75.30/bbl, seen at 01:10 GMT today, to $74.80/bbl (as of 10:35 GMT, time of writing).
$75! We smelled it coming! It was one of those things when we actually felt the bullish signals telegraphed by the EIA inventories. And also note the upcoming burst of gasoline demand for Thanksgiving. We also heard today that companies had booked forward USG loadings into Europe. This in turn resulted in some companies selling the forward CFDs. It all sort of makes sense. The bulls were having fun. Well, it’s been another day of peaks and troughs. Europe woke up in a frenzy and wanted to try Brent for $75 but came up short and it took a second assault to break through the ceiling at 15:42 GMT. Before 18:00, markets cemented the move above the $75 handle.
The M1 Henry Hub natural gas futures rallied to $3.563/MMBtu on 22 Nov, although the benchmark natural gas futures contract appears to be meeting resistance at this level. According to LSEG, the amount of gas flowing to the seven big operating US LNG export plants was on track to rise to a 10-month high this week….
The Jan’25 Brent futures contract was supported this afternoon, moving up more than $1 from $73.80/bbl at 12:00 GMT to $75.05/bbl at 17:35 GMT (time of writing). Geopolitical tensions remain at the forefront as Ukraine’s ex-military Commander-in-Chief Valery Zaluzhny stated “the Third World War has begun” today, speaking at the Ukrainska Pravda’s UP100 award ceremony. In the news, Gunvor has undertaken a temporary economic shutdown of its Rotterdam refinery, with a capacity of less than 80kb/d, due to a “lack of prompt availability of commercially viable feedstock”. Closure will be effective as of 25 Nov according to Bloomberg. In other news, Kazakhstan’s Tengiz oil field is now producing 10,000 tonnes per day less than planned after repairs, KazMunayGas CEO Askhat Khasenov said. Finally, Russia’s Lukoil is restoring operations of its catalytic cracker complex at their NORSI oil refinery, after breaking down on 13 Nov. NORSI refines about 16 million tons of crude per year, or 5.8% of Russia’s total refined crude, as per Reuters. At the time of writing, the Jan/Feb’25 and Jan/Jul’25 Brent futures spreads stand at $0.45/bbl and $1.77/bbl, respectively.
Dubai was very strong today and physical gained an impressive $1.32/bbl to reach $74.15/bbl. Once again, the price was right for Europe and it bought Brent, and almost touched $75 by the Asian close. We said yesterday that $75 could be on the cards, and it’s been teasing us this morning. Brent futures closed at $74.77/bbl, $1.21/bbl up on the day. But then the choppiness we’re getting accustomed to in European trading came in and the upward march stalled and dropped back towards $74.30/bbl just after 09:00 GMT. Dubai’s strength saw Brent futures/Dubai partials drop to 62c, from 73c yesterday.
The Jan’25 Brent futures contract strengthened this morning from $74.20/bbl at 07:00 GMT up to just over $74.80/bbl at 08:15 GMT. We saw a decline to $74.18/bbl by 09:15 GMT, however, recovered to around $74.40/bbl at 10:45 GMT (time of writing). Crude oil prices were elevated today as markets continue to focus on rising geopolitical tensions between Russia and Ukraine. In the news today, Russian Deputy Prime Minister Alexander Novak said at a meeting with OPEC that Russia’s energy market is under significant pressure and they will continue to develop cooperation with OPEC countries, according to a Reuters report. Meanwhile, Russia is estimated to have supplied North Korea with more than 1mb of oil since March this year, according to satellite imagery analysis from the Open Source Centre. In other news, Hungarian Prime Minister Viktor Orban stated he would invite Israeli Prime Minister Netanyahu to visit Hungary, guaranteeing that the International Criminal Court arrest warrant against Netanyahu would “not be observed”. Finally, Iran’s nuclear chief Mohammad Eslami has issued an order to launch a series of new and advanced centrifuges, in response to an IAEA resolution on 21 Nov condemning Tehran’s nuclear cooperation and transparency. At the time of writing, the Jan/Feb’25 and Jan/Jul’25 Brent futures spreads stand at $0.52/bbl and $1.70/bbl, respectively.
Up, up, up it went! Brent flat price surged through the European morning, blowing through the $74 handle before midday in London from below $73 at Europe’s open. Fears around big missiles and bomb threats produce massive market moves! $75 was tantalising, but Team America decided not today. A gradual, bumpy decline through the afternoon put Brent back below $74, and it closed the European session at $73.91/bbl. Dubai set the tone for the day and North Sea traders didn’t want to break the cagey mould. Shell raised its bid for a 12-16 Dec Midland to Dated +$1.70 but nobody was tempted, while Gunvor withdrew its 13-17 Dec and 21-25 Dec Midland offers at $2.50. Compared to their previous showings, Totsa went suddenly silent in the North Sea after barely bothering to show up in Dubai this morning. Maybe 19 Dubai convergences and 6 North Sea cargoes in November have given the French their fill. Alternatively, they could just be feeling the effects of a big old binge yesterday. Feeling a bit worse for wear, monsieur?
The Jan’25 Brent futures contract declined from an intraday peak of $74.37/bbl at 12:30 GMT down to $73.55/bbl at 17:40 GMT (time of writing). In the news today, China is projected to import around 11.4mb/d of crude oil in November, the highest volumes since August imports of 11.56mb/d, according to Reuters citing tanker-tracking and port data by LSEG and Kpler. In other news, Russian refineries are likely to reduce or keep their crude throughputs unchanged in the coming weeks as the gasoline export ban, persistent rail delays, and increases in excise taxes continue to hurt margins, as per S&P Global. Finally, the ICC has issued arrest warrants for Israeli PM Netanyahu, his former defence chief Yoav Gallant, and a Hamas leader, Ibrahim al-Masri, for alleged war crimes and crimes against humanity in the Gaza conflict. According to a Financial Times report, Israel stated in August that Ibrahim al-Masri was killed in an airstrike in Gaza a month earlier. At the time of writing, the Jan/Feb’25 and Jan/Jul’25 Brent futures spreads stand at $0.41/bbl and $1.38/bbl, respectively.
This week has seen a battle between bullish and bearish forces, kicking off with a focus on poor Chinese oil demand as China’s refinery run rates fell for the seventh month in a row, down 4.6% y/y. Moreover, China’s VAT rebate reduction stoked fears of lower clean oil product exports for 2025. This initial bearish momentum was compounded by waning geopolitical risk in the Middle East, with Hezbollah agreeing to a US proposal for a ceasefire and ongoing Israeli strikes on Lebanon now firmly priced in….
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.
