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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 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.
EIA inventories showed a 1.844 mil bbls draw in the week ending November 22, nothing right? Compared to a year ago inventories are down a massive 21.22 mil bbls, and the tanks at Cushing are looking particularly dry… one to keep an eye on. But the market yawns. The draw in crude was seemingly driven by a drop in imports, which fell by 1.886 mil bbls. Gasoline inventories increased by 3.314 mil bbls, but on a year-on-year basis, gasoline inventories are almost 6 mil bbls lower. In fact, national gasoline stocks remain close to the bottom of their 5-year range. RBOB futures flat price fell by almost 2c/bbl immediately after the release, pretty minor really. Other than that, the market said “I don’t care.”
The Jan’25 Brent futures contract has weakened this afternoon, falling from $73.05/bbl at 12:00 GMT to $72.45/bbl at 17:50 GMT (time of writing). EIA data for the week to 22 Nov showed a larger-than-expected draw of 1.84mb in US crude oil inventories, compared to a build of 0.5mb the prior week. In the news today, Russian Deputy Foreign Minister Sergei Ryabkov warned the US today to halt a “spiral of escalation” over Ukraine, stating “you mustn’t supply Kyiv with everything they want”, according to Reuters. Meanwhile, Russian state news agency TASS quoted an official saying Moscow was working to put its Sarmat ICBM, part of its strategic nuclear arsenal, on combat duty. In other news, the Kazakh Energy Ministry has proposed widening the current six-month ban on fuel exports to gasoline, jet fuel and bitumen, starting January 2025, according to Interfax. Finally, Prax is continuing to work toward buying Shell’s minority stake in the Schwedt oil refinery in east Germany, as per Bloomberg. The shareholder structure of the Schwedt refinery has been complicated by the involvement of Russia’s Rosneft, whose stake was seized by the German government. At the time of writing, the Jan/Feb’25 and Jan/Jul’25 Brent futures spreads stand at $0.60/bbl and $1.68/bbl, respectively.
Ceasefire begins in Lebanon! Israel and Hezbollah agreed to a 60-day truce after mediation from the US finally saw some progress. The US is hopeful this first step will calm tensions in the Middle East and pave the way to broader de-escalation and we hope it does too. The ceasefire began at 4 am local time, and it looks like both sides are taking the agreement seriously. We’re happy So far, no violations have been noted. As part of the ceasefire deal, Israel requires Hezbollah’s fighters to move out of southern Lebanon to lands above the Litani River. We hope the ceasefire can last and the US optimism is not misplaced. Netanyahu clarified, “With the United States’ full understanding, we maintain full freedom of military action.” Hopefully, this presents an opportunity for leaders to come to their senses and stop the wasteful bloodshed.
The Jan’25 Brent futures contract saw strength this morning amid rangebound price action, increasing from $72.90/bbl at 07:00 GMT to $73.05/bbl at 10:40 GMT (time of writing). Prices saw a brief dip to around $72.70/bbl at 09:10 GMT before rising to this morning’s high of $73.30/bbl at 09:35 GMT. In the news today, the Israel-Hezbollah ceasefire approved on Wednesday has taken effect with no reports of early violations of the 60-day truce, according to Bloomberg…
Ceasefire in Lebanon to be announced at 10 p.m., takes effect at 10 a.m., sources in Israel said. A glimmer of peace pierced with bombings but a step in the right direction. Crude prices were rangebound and choppy in the afternoon. Front-month Brent futures pierced the $74 level before rapidly retreating again to the comfy 73s safe space before a post-window sell off saw flat price drop down to almost the $72/bbl level. Currently, OPEC has pencilled in a 180kb/d increase in supply for January, but our sources expect a wimpy rollover and continuing vigorous cheating. The oil market, no surprises here will enter surplus next year. Any new OPEC production will go into inventories, contango here we come! And we all know what is going on behind closed doors in Abu Dhabi, Baghdad and Tehran, especially there. Just look at the fuel oil exports from Iraq. In 2023, they exported a record 14 million tonnes; this year, they are set to break 18 million tonnes. Never mind if the fuel oil was a little lighter and less refined than usual… We hear similar stories for spiked barrels out of other nearby areas. Mix in a little condensate, and it’s not crude oil anymore; it’s a whole new thing… and, therefore, excluded from the quotas. Guess where?
The Jan’25 RBOB futures contract has been rangebound over the past fortnight, trading between 1.95c/gal to 2.00c/gal….
The Jan’25 Brent futures contract initially traded rangebound around high $73/bbl levels this afternoon, before falling to $72.30/bbl level at 18:00 GMT (time of writing). There was a brief spike to $74.25/bbl just before 14:45 GMT as a Bloomberg report revealed that OPEC+ had begun talks on delaying the restart of oil production again.
The physical Dated market remains very strong, with the physical differential remaining in triple figures for around ten days now, at 104c/bbl on 25 Nov. There has been a slight introduction of softness this week as players are pricing in the physical, which is projected to come off into December. In the window, all eyes have really been on Totsa in the past week or so as they have been supporting the physical diff with good cargo buying, potentially for placing into Chinese refineries. There seems a slight unease in the market as they expect this play to end soon and the gap between the physical support and the forward curve, which has seen some softening on expectations of this. We don’t know how much more ammunition they have here, how many more barrels they can buy before the rug is yanked from the market. Talking of Yanks, we are expecting strong US exports in the coming weeks, with Midland cargoes likely flooding the Dated market. How much of this wave Totsa is prepared to buy is another question.
Another week brings another selection of new trade ideas from Onyx Research, this time looking at trades in LPG and Gasoil 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.
The window was once again a tight battle between buyers and sellers, but by the close of Asia, Unipec was once again the driver in the window, swatting away bids from Totsa and co, seeing the Dubai physical premium ease to 76c/bbl, down 6c from yesterday. There were even more convergences, too; in fact, we counted three more, meaning 42 total for the month. Exxon declared an Upper Zakum to Total, Trafi declared and Al Shaheen… also to Total. But Total weren’t the only buyers to converge today; PetroChina also converged with Reliance on an Upper Zakum. Things are clearly heating up for Upper Zakum, which has traded almost 60% of their exportable production. In total, across Al Shaheen, Oman and Upper Zakum almost 40% of exportable production has been traded in the window. That’s a huge chunk of the programme this month. Totsa alone account for 27% of total exportable production this month at 14.5 mil bbls, which as we discussed yesterday, will be ultimately landing in China.
The Jan’25 Brent futures contract saw steady support this morning, increasing from $73.13/bbl at 07:00 GMT up to $73.70/bbl at 10:40 GMT (time of writing).
$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.
