Our latest energy derivatives stories across the World.
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
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.
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
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.
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 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
Onyx’s in-house CTA positioning model determines the net positioning of CTAs in a range of futures benchmarks. The week ending 01 Oct saw CTA positioning quite flat in the week, overall seeing a small net increase in the combined futures. Since then, there has been good strength from CTAs, with Brent passing its 50-day average, which likely bouldered their strength. In crude, we saw Brent clock in fall in net positioning, from around -30mb to -37mb on 1 Oct. WTI futures also decreased in the week, from over -25mb on 24 Sep to -33mb on 1 Oct. The largest increase in CTA net positioning in the week to 01 Sep was in ICE Brent. The products’ net positioning all fell weakly, with RBOB seeing RBOB continuing to see the lowest net positioning in tepid market conditions.
Powered by Volatility The Dec’24 Brent futures contract fell below $78.00/bbl on Friday evening but again rallied to $79.65/bbl on 07 Oct at 10:40 BST (time of writing). Volatility remains elevated in the benchmark crude futures contract, leading us to
Turbulent Times Ahead On Monday, we predicted the Dec’24 Brent futures to finish the week between $69-74/bbl amid an oversupplied oil market. However, the futures contract witnessed an injection of bullish sentiment due to growing concerns regarding the regional escalation
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 27 Sep saw CTA positioning rise and fall, overall to leave a very small net change. In crude, we saw Brent clock in an almost 0% change increase, w/w, at around -32.8mb after reaching a peak of almost -30mb. WTI futures saw heavier selling as the net positioning fell around 5mb (20%). The largest increase in CTA net positioning in the week to 24 Sep was in ICE Gasoil, which saw an almost 6mb increase, this brought the CTA net positioning for gasoil to the highest in the selected futures.
We are looking for the front-month December 24 contract to finish the week between $69-74/bbl with the drivers dictating the rangebound regime essentially unchanged: Geopolitical tensions in the Middle East moved a notch higher. Israel has stepped up kinetic action
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.
Lacking a spark We expected Nov’24 Brent futures to end the week trading between $70/bbl and $75.00/bbl as we failed to see it breaking out of a rangebound market. Price action this week validated this view, with the contract trading
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
Onyx’s in-house CTA positioning model determines the net positioning of CTAs in a range of futures benchmarks. The week ending 20 Sep saw CTA positioning rise across the crude futures alongside oil products albeit still remaining very net short. In crude, we saw Brent and WTI futures clock in a 34% and 39% increase, w/w, to -32.9k lots and -24.5k lots, respectively. This support emerged after CTA positioning approached the “max short” levels recorded in both contracts. Oil products also witnessed a rise in CTA net positioning from last week’s extremely short position. In the middle distillates complex, gasoil and heating oil climbed by 29% and 22%, respectively, to -33k lots each. In gasoline, RBOB futures recorded a 20% increase in CTA net length w/w to -37.8k lots.
Lacking a spark, continued rangebound prices in Brent. We are looking for the front month Nov’24 contract to finish the week between $70-75/bbl as we fail to see any reason for Brent to break out of this rangebound regime. This
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 compares and contrasts the Bloomberg survey of ICE Brent and NYMEX WTI forecast to their high/low range as well the forward curve
Finally, some strength! At the start of the week, we forecasted that the front-month Brent futures contract would tick slightly higher through the week, but ultimately remain rangebound between $71-74/bbl. As of 20 Sep, 11:50 BST (time of writing), the
This report covers services and manufacturing PMI across the G20 countries
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
Brent has recovered from sub-$70/bbl, and there has been a sigh of relief in many markets. But are we out of the woods yet?
This report reviews the key data from the US EIA’s Weekly Petroleum Status Report
The naphtha market witnessed a bearish shift in sentiment over the past fortnight, driven by dissipating geopolitical risk premia and deteriorating demand narratives ahead of the Northern Hemisphere winter.
The Brent/Dubai market saw another tumultuous fortnight that ultimately resulted in an upwards shift in the prompt tenors. Cal25 has been comfortably supported at the $1/bbl level. However, the main story has been in the front, where the Nov’24 Brent/Dubai initially threatened to break below $1/bbl on multiple instances before rallying above $1.20/bbl on weakness in Nov’24 Dubai. As Nov/Dec Dubai witnessed aggressive selling…
Over the past week, the Dated Brent market has been unmistakably rangebound. The front Brent spread mean reverted around 40c, and the geopolitical risk premium normalised in the flat price in lieu of genuine, bullish movements from either side as third parties try eagerly to resolve and or protect energy security ahead of the US election in particular. The prompt DFL fell to -10c/bbl on 15 Oct as spreads and the flat price came off on the news that the Washington Post reported Israel would not strike Iranian Energy, alongside British majors and Geneva trade houses offering Ekofisk, moving the physical diff to around 16c. The physical diff weakened following this, but the DFL recovered to 18c/bbl on 22 Oct in thin trading.
The Dec’24 Brent futures contract saw sustained strength this afternoon, trading at $74.82/bbl at 12:00 BST and reaching $76.20/bbl at 17:45 BST (time of writing). Price action was on the rise this afternoon as the Chinese Ministry of Commerce lifted its crude oil import quota for 2025 by 6% to 5.14mb/d, as per Reuters. In the news today, the IMF has lifted their 2024 growth forecast for the US by 0.2% to 2.8% but has cut the forecast for China by 0.2% to 4.8%, citing continued weakness in the property sector and low consumer confidence. The IMF’s 2025 China growth forecast was unchanged at 4.5%. In other news, Chinese demand for natural gas is set to jump by more than 50% by 2040 and reach 100m tons in LNG imports very soon, according to an executive at Cheniere Energy, Yingying Zhou, in a statement at the Asia Gas Markets conference. Finally, a Bloomberg report revealed that the US is monitoring shadow fleets in Southeast Asia, posing safety and environmental hazards. Malaysian coasts currently harbour the largest cluster of shadow fleet tankers, where ship-to-ship (STS) transfers are made to hide the origin of the oil. At the time of writing, the front-month (Dec/Jan’25) and six-month (Dec/Jun’25) Brent futures spreads are at $0.50/bbl and $1.77/bbl, respectively.
Another week brings another selection of new trade ideas from Onyx Research, this time looking at trades in distillates, naphtha and LPG 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.
Conflict is the gold dust on oil markets. $75.00 market here we are! Post window Brent markets rose up to $75.14/bbl.
After a softish close in Singapore, the rumour mill got going about Netanyahu meeting his military leaders this evening.
Pardon us, but Mr. N thought he was a hands-on man, who meets with them every day. Never mind, Brent duly
responded and showered money to all the longs after trading at nearly $73.50/bbl in the morning. Shorts are an easy
market in the period preceding whatever the Israelis want to do. We remain of the thinking that any action will be very limited in nature as the Election is soon and Kamala’s job is on the line.
The Dec’24 Brent futures contract found strength this morning, moving from $73.85/bbl at 07:00 BST up to $74.95/bbl at 11:20 BST (time of writing). Prices have been supported this morning as tensions heighten in the Middle East, with airlines including Emirates and Qatar Airways now suspending flights to Iran. In the news today, US Secretary of State Antony Blinken has arrived in Israel to meet Israeli Prime Minister Netanyahu and revive ceasefire talks. Just a few hours before Blinken’s arrival, Hezbollah has fired several missiles into Tel Aviv and Haifa, according to Financial Times. In other news, Russia’s seaborne crude shipments have risen to their highest level since June this year. Russia shipped 3.47mb/d of crude in the four weeks to 20 Oct, a 140kb/d jump in four-week average cargoes, as per data by Bloomberg. Finally, the Chinese Ministry of Commerce has increased China’s 2025 crude oil import quota for non-state-owned firms at 5.14mb/d. The ministry will add and adjust quotas based on companies’ demand and new capacity. At the time of writing, the front-month (Dec/Jan’25) and six-month (Dec/Jun’25) Brent futures spreads are at $0.38/bbl and $1.63/bbl, respectively.
As the US elections peek over the horizon and Trump serves up Maccies fries, the oil markets trudge on. We were on tenterhooks awaiting the window this afternoon after last week’s dramatic display of collapsing diffs as the Dated Donkey got hammered below the ground. Today’s window was offered, but above the zero line and no bidders played ball. Glencore offered two Forties cargoes: for Nov 10-12 at Dated +10c and for Nov 13-15 at +20c, but didn’t find any takers. Phillips was the other player offering, bringing a mid-Nov Midland at Dated +$1.60 to the table. The futures-physical dislocation remains, but may be closing in. Physical diffs are around flat, while Brent futures front spreads weakened from 40c on Friday to 32c today.
The Dec’24 Brent futures contract found strength this morning, trading at $73.29/bbl at 07:00 BST and increasing to $74.10/bbl at 11:00 BST (time of writing). Price action saw upward movement this morning amid a new wave of Israeli airstrikes on Hezbollah-affiliated financial institutions, heightening concerns that Israel is expanding its offensive beyond military infrastructure. Meanwhile, satellite imagery has shown that Iran has partially filled its Jask oil terminal with crude oil, as the country seeks to reduce its reliance on the Strait of Hormuz for oil exports. In the news today, according to the General Administration of Customs (GACC), China reduced its crude imports from major suppliers in the month of September. GACC data showed China’s daily crude imports from Russia, Iraq, and Brazil fell m/m by 4.52%, 16.00%, and 48.85%, respectively. However, crude imports from Saudi Arabia increased to 1.81mb/d, up 44.92% m/m since August. In other news, South Sudan’s crude oil exports are set to resume as a blockage in a northern pipeline via Sudan has been cleared. As per Bloomberg, the pipeline funnelled more than 150kb/d to Port Sudan prior to its breakdown in February this year. Finally, the Indian oil minister Hardeep Singh Puri stated that India’s petrochemical sector is projected to receive investments worth $87 billion over the next decade to meet rising demand. At the time of writing, the front month (Dec/Jan’25) and six-month (Dec/Jun’25) Brent futures spreads are at $0.36/bbl and $1.43/bbl, respectively.
In the week ending 15 Oct, Brent and WTI futures saw increasingly choppy price movements, although both contracts concluded the week softer than where they started. Combined Brent and WTI managed-by-money positioning showed a 41.6mb (-9.8%) decline in long positioning w/w alongside the removal of 1.2mb (-0.8%) of short positions. In addition, producers/merchants liquidated 9.4mb (-0.70%) and 36.8mb (-2.30%) from their Brent and WTI longs and shorts, respectively.
The Brent futures complex sharply retraced lower last week as the geopolitical risk premia faded on the prospect that Israel’s retaliation strike against Iran will not be targeted towards its oil or nuclear facilities. The week ending 14 Oct saw Brent have its largest weekly decline since the week ending 6 Sep. Price action in the Dec’24 contract rapidly fell by $3 overnight on 15 Oct from around $77.50/bbl to $74.50/bbl following the release of the Washington Post article before stabilising and trading rangebound between $74-75/bbl.
Flat price is in a funk, shimmying and sliding but going nowhere. The Iron Dome has been referred to as the Iron Colander following Iran’s strikes against Israel and it seems like air defences aren’t the only leaky thing in Israel. A leaked document appeared to illustrate Israel’s preparations for a retaliatory strike against Iran. The mole or tongue wagging source has not yet been identified, but don’t worry, the US is on the case. The Israeli military will have to go back to the drawing board and rework their plans. Despite this leak suggesting escalation is probable and maybe even imminent, Brent flat price did little at this morning’s open, though it rose steadily from around $73/bbl towards the $74/bbl handle by 10:45 BST. And another day, another ceasefire effort. The US envoy Amos Hochstein will reportedly hold talks with Lebanese officials today, aiming to arrange a ceasefire… again.
The Dec’24 Brent futures contract found strength this morning, trading at $73.29/bbl at 07:00 BST and increasing to $74.10/bbl at 11:00 BST (time of writing). Price action saw upward movement this morning amid a new wave of Israeli airstrikes on Hezbollah-affiliated financial institutions, heightening concerns that Israel is expanding its offensive beyond military infrastructure. Meanwhile, satellite imagery has shown that Iran has partially filled its Jask oil terminal with crude oil, as the country seeks to reduce its reliance on the Strait of Hormuz for oil exports. In the news today, according to the General Administration of Customs (GACC), China reduced its crude imports from major suppliers in the month of September. GACC data showed China’s daily crude imports from Russia, Iraq, and Brazil fell m/m by 4.52%, 16.00%, and 48.85%, respectively. However, crude imports from Saudi Arabia increased to 1.81mb/d, up 44.92% m/m since August. In other news, South Sudan’s crude oil exports are set to resume as a blockage in a northern pipeline via Sudan has been cleared. As per Bloomberg, the pipeline funnelled more than 150kb/d to Port Sudan prior to its breakdown in February this year. Finally, the Indian oil minister Hardeep Singh Puri stated that India’s petrochemical sector is projected to receive investments worth $87 billion over the next decade to meet rising demand. At the time of writing, the front month (Dec/Jan’25) and six-month (Dec/Jun’25) Brent futures spreads are at $0.36/bbl and $1.43/bbl, respectively.
We’re hearing more and more people say Europe is slowly dying. We disagree. We think it is dying rather quickly. Economically, we mean. Or maybe it’s already in the zombie stage. The heartbeat is faint but the rhetoric is still strong. It reminds us of AI hallucinations. Brain and reality are not aligned. Debt and manufacturing weakness don’t make the region look healthy and it’s verging on flatlining. Just check out France’s insolvency filings! Corporate bankruptcies are up 49% since August 2021. Business as usual, nothing to see… Or better yet, nothing to see here after the companies are dead.
Dec’24 Brent futures weakened this afternoon, from over $74.50/bbl at 13:20 BST to $72.55/bbl at 16:25 BS, recovering $73.25/bbl at 17:10 BST (time of writing). Total is planning a shutdown of its largest European refinery, in Antwerp, in 2025. This facility, which is the company’s biggest oil-processing plant in Europe with a capacity of around 340kb/d, will undergo maintenance starting in September. The scheduled work will focus on the crude processing units and one of the refinery’s two fluid catalytic crackers (FCCs). China’s diesel exports fell to 350kt in September, the lowest since June 2023, due to limited shipment quotas and near break-even margins. This marks a 71% drop from the same month last year, with total petroleum exports reaching just 730kt, the lowest since April. China’s new home prices in September saw their steepest decline since May 2015, dropping 5.8% year-on-year, according to official data. This follows a 5.3% decrease in August, despite efforts to revive the property sector. At the time of writing, the front month (Dec/Jan’25) and six-month (Dec/Jun’25) Brent futures spreads are at $0.41/bbl and $1.43/bbl, respectively.
High Sulfur Fuel Oil (HSFO) remains strong this fortnight in both Northwestern Europe (NWE) and Singapore, although we now see increasing volatility in the HSFO complex. The Nov’24 3.5% barge crack rallied to -$7.30/bbl on 14 Oct before simmering off to -$7.85/bbl on account of weak softer physical pricing but rallied to -$6.80/bbl on 18 Oct, likely supported by lower crude. The Nov/Dec’24 3.5% spread fell from $17/mt on 11 Oct to $12.50/mt on 17 Oct but saw support at this level. In the East, the 380 and 180 cst market both saw support this fortnight, with the Nov/Dec’24 380 spread rallying to $10.50/mt on 16 Oct – although it met resistance here. The Nov’24 and Dec’24 Visco (180 vs 380) witnessed significant buying by a Singaporean trade house and Middle Eastern NOC, with the Nov’24 rallying $5.50 to $15.75/mt from Oct 04-18 (at the time of writing).
China beats GDP growth market expectations, but let’s start with Dubai and our famous Totsa Taureau! And, by the way, also keep an eye on the Brent/Dubai spread as Totsa sells North Sea and buys Middle East. Maybe they are following Macron’s destruction of the French budget as a hint to sell the European benchmark. It looks like Totsa’s monumental efforts in the Dubai window are paying dividends. Swaps remained steady, just 2c down from yesterday, as the physical strengthened. This put the phys premium back up to $1.68, above the October average again. Totsa must take much of the credit; it led the buyside pack’s forward march. The buyers and sellers came together at $74.19. Exxon hit bid after bid, but Reliance and Chevron were also selling. As ever, Mitsui joined Totsa on the buyside, and the old pals from way back in August, Vatman and Gobin, renewed their dynamic duo status, each picking up partials. But gone are the glory days of their domination of the window. Meanwhile, Trafi is keeping the market guessing about its strategy; in today’s window it flipped to the buyside, having been major seller in previous sessions. Repsol converged with Mitsui, nominating an Upper Zakum.
The Dec’24 Brent futures contract saw weakness this morning, trading from $74.76/bbl at 07:00 BST and declining to $74.06/bbl at 11:15 BST (time of writing). Prices lacked strength this morning amid reports of Chinese oil refining falling to a three-month low of 58.7 million tons, a reduction of 1.6% y/y, according to Bloomberg. In the news today, Israeli authorities have released a drone video allegedly displaying Hamas leader Yahya Sinwar dying in the ruins of building in southern Gaza, as per Reuters. Following Sinwar’s death, Israeli Prime Minister Netanyahu has promised to continue conflict in Gaza and Lebanon. In other news, Chevron and the Nigerian National Petroleum Company (NNPC) have made a new oil discovery in the Niger Delta, according to S&P Global. Chevron has yet to offer information on potential production targets or a timeline for facility operations. Finally, Russian oil producer Lukoil stated that the company had no plans to buy back shares from foreign investors after requesting permission from the government to buy back 25% last year, Russia’s Deputy Finance Minister Alexei Moiseev said. At the time of writing, the front month (Dec/Jan’25) and six-month (Dec/Jun’25) Brent futures spreads are at $0.43/bbl and $1.62/bbl, respectively.
The physical and futures detachment still has us scratching our heads. Traders were waiting with offers on the table but found no bidder. Glencore offered a mid-Nov Ekofisk at Dated +$1.75 and a mid-Nov Forties at Dated +$0.45; BP and Total each offered an early-Nov Ekofisk at Dated +$1.45 and +$1.95, respectively. Phillips also offered a Midland for mid-Nov at +$1.75. A rare 640kb Hebron cargo was offered by Suncor at Dated -$2.15 for end-Nov loading. But none of these offers were met with a buyer.
Dec’24 Brent futures fell from close to $80.00/bbl to $74.00/bbl this week as the geopolitical risk premium was priced-out and back in at a rate that puts no one’s mind to rest. As soon as part of the premium has been chipped out of the price, mid to low-70s were not far behind, and they must feel at home. Volatility has dropped as $74.00/bbl has proven less mean-reverting and more mean-unwavering, with Dec’24 trading between $73.50/bbl and $75.00/bbl for a few days. The Washington Post seems confident in Iran’s energy security, although this was a bit undermined by Netanyahu purposefully undermining it and reminding the international community that they will act however they feel ‘necessary’. Chinese news, positive or negative, has taken a breather this week. The geopolitical tension is with all hopes of de-escalating, leaving little to distract from the supply/demand that the market has been happy to pin at mid-70s.
The Dec’24 Brent futures contract strengthened marginally this afternoon, trading at $73.96/bbl at 12:00 BST and reaching $74.20/bbl at 17:50 BST (time of writing). We saw volatility in price action throughout the afternoon amid the release of the IEA October oil market report, alongside concerns of conflict escalation in the Middle East. In the news today, the IEA has released their oil market report for October, showing global oil demand is set to increase by just 862kb/d this year due to decelerating demand in China. This latest estimate is down from the 903kb/d forecast published in the September IEA report. In other news, Israeli troops have begun clearing landmines near Golan Heights, signalling a potential expansion of ground operations against Hezbollah for the first time further east along Lebanon’s border, according to Reuters. Finally, Russian refinery maintenance has pushed the country’s oil exports to their highest level in three months. Average oil exports inched up by 7kb/d to 3.33mb/d in the four weeks to 13 Oct, as per data compiled by Bloomberg. At the time of writing, the front month (Dec/Jan’25) and six-month (Dec/Jun’25) Brent futures spreads are at $0.37/bbl and $1.53/bbl, respectively.
The window was ram-packed with ‘sells to Totsa’ as bids were whacked almost as soon as they hit the table. The French major seems to be trying to defend a tired-looking physical premium which has declined from the $1.80s to $1.54 today. It reminded us of the Maginot line for those WW2 history buffs. We know what happened there. Totsa stepped on the gas and got hit for partial after partial, while Mitsui threw their hat in alongside the indefatigable French. At least someone in France has some money, even if the government doesn’t. Dear trader in Asia, look at Europe. It doesn’t look good.
The Dec’24 Brent futures contract weakened amid choppy price action from $74.39/bbl at 07:00 BST to $74.35/bbl at 11:25 BST (time of writing). Price action showed volatility throughout the morning while Iran issued a warning to Israel against retaliation for Iran’s 01 Oct missile attack. In the news today, the commander of Iran’s Revolutionary Guards, Hossein Salami, stated in a televised speech: “if you (Israel) commit any aggression against any point, we will painfully attack the same point of yours”. Meanwhile, Israel has intensified strikes on Eastern Lebanon, with the town of Al-Khiam hit by seven airstrikes in less than 10 minutes last night, according to the state-affiliated National News Agency. In other news, Oman’s state-owned upstream oil and gas operator, OQ Exploration and Production Company (OQEP), raised over $2 billion from its IPO on the Muscat Stock Exchange. According to Bloomberg, the OQEP deal is the biggest Gulf IPO since the $2.5 billion share sale of Adnoc in 2023. At the time of writing, the front month (Dec/Jan’25) and six-month (Dec/Jun’25) Brent futures spreads are at $0.44/bbl and $1.72/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.
The North Sea was brutal today. The Dated Donkey got killed and went subterranean. In yet another instance of Dated Brent and components acting wildly this year, Forties traded below the zero line, after bidding went as high as +$2.20 in early August. The instrument needs a proper think-through before too many producers and consumers buffeted by the volatility shout out words starting with F or M, which we could take for Fiddling and Manipulation. Maybe there are other nouns. Diffs got smashed as Shell kept offering a mid-Nov Forties down to -5c below Dated. It dangled for a while before Glencore lifted it. They had to think before going for the bargain. The differential collapse contrasted with a Brent flat price that only moved upwards by 25c. There was one other trade in the window: Equinor lifted an early Nov CIF Ekofisk at +$1.55 over Dated from BP. What’s driving Shell to send the physical diff down? We don’t know, but it worked!
The Dec’24 Brent futures contract strengthened marginally this afternoon, trading at $73.96/bbl at 12:00 BST and reaching $74.20/bbl at 17:50 BST (time of writing). We saw volatility in price action throughout the afternoon amid the release of the IEA October oil market report, alongside concerns of conflict escalation in the Middle East. In the news today, the IEA has released their oil market report for October, showing global oil demand is set to increase by just 862kb/d this year due to decelerating demand in China. This latest estimate is down from the 903kb/d forecast published in the September IEA report. In other news, Israeli troops have begun clearing landmines near Golan Heights, signalling a potential expansion of ground operations against Hezbollah for the first time further east along Lebanon’s border, according to Reuters. Finally, Russian refinery maintenance has pushed the country’s oil exports to their highest level in three months. Average oil exports inched up by 7kb/d to 3.33mb/d in the four weeks to 13 Oct, as per data compiled by Bloomberg. At the time of writing, the front month (Dec/Jan’25) and six-month (Dec/Jun’25) Brent futures spreads are at $0.37/bbl and $1.53/bbl, respectively.
After Monday evening’s plummet, Brent flat price continued to cool a little today. It closed Asian trading at $74.17/bbl and looks nearly ready to move lower again. Not quite yet though, as Brent appears to have found some support around the $74/bbl mark. The scale of the price drop following the Washington Post headline demonstrates that the market is still very nervous about any Middle East-centred headlines, although it has largely calmed down from overhyped fears that the passage of tankers through the Strait of Hormuz could be disrupted. Look back to the Tanker War in the 1980s, no one would want this, but it didn’t stop the flow of oil anyway.
The Dec’24 Brent futures contract continued to weaken this morning, falling from $74.80/bbl at 08:25 BST to briefly dropping below $74/bbl at 10:20 BST. While the benchmark crude futures contract found support here, it fell to $73.88/bbl at 11:35 BST (time of writing).
Markets took a moment to recalibrate today, following last night’s major dump on the story that Israel would not strike Iranian oil. Brent flat price crossed into the 73 handle we’ve been awaiting and closed the day at $73.73/bbl. Today had another very offered window as the Dated Donkey keeps getting smacked. BP, Glencore and Total offered down Ekofisk, while Shell and Glencore offered Forties, with Glencore offering a mid Nov Forties down to +46c over Dated. The physical diffs got spanked, from +$1.05 on Friday to +46c yesterday, and took another pounding today. The whole CFD curve slumped into contango, with balweek falling 54c from yesterday to -31c. Next week’s CFD fell 49c on the day too to -51c.
The Dec’24 Brent futures contract strengthened marginally this afternoon, trading at $73.96/bbl at 12:00 BST and reaching $74.20/bbl at 17:50 BST (time of writing). We saw volatility in price action throughout the afternoon amid the release of the IEA October oil market report, alongside concerns of conflict escalation in the Middle East. In the news today, the IEA has released their oil market report for October, showing global oil demand is set to increase by just 862kb/d this year due to decelerating demand in China. This latest estimate is down from the 903kb/d forecast published in the September IEA report. In other news, Israeli troops have begun clearing landmines near Golan Heights, signalling a potential expansion of ground operations against Hezbollah for the first time further east along Lebanon’s border, according to Reuters. Finally, Russian refinery maintenance has pushed the country’s oil exports to their highest level in three months. Average oil exports inched up by 7kb/d to 3.33mb/d in the four weeks to 13 Oct, as per data compiled by Bloomberg. At the time of writing, the front month (Dec/Jan’25) and six-month (Dec/Jun’25) Brent futures spreads are at $0.37/bbl and $1.53/bbl, respectively.
The water has been anything but calm here in the North Sea, with the Dated Brent complex surging up into October amid a more robust futures complex and supported physical differential.
Traders live and die (financially) by the sword of their decisions. And it has been like this: hear War, buy! Hear Peace, sell! Hear economic news, hmm change that channel and let’s watch the War TV station. Here come the rumours… like Netanyahu promising not to hit Iran’s cities, nuclear plants, nor oil installations. (Can you trust him?) And the overbought market faints. Brent prices correct to the $73+ level. The drop sets the stage for the next uptick and just in time as Israel sort of denies any of the above. It is a ride with certain outcomes. The main players’ economies are facing headwinds and commodity prices reflect that from iron ore to oil. Geopolitics is red hot and any shooting will invite more shooting and this means, buy. But, but, but, the US does not want any shooting and neither do Europe’s main actors. They are financially too wobbly and the US elections means pressure on Israel not to shoot. Make your bets, people, but the outcomes are clear.
Another week brings another selection of new trade ideas from Onyx Research, this time looking at trades in fuel oil, gasoline and propane 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 Dec’24 Brent futures contract showed weakness throughout the morning, trading at $78.09/bbl at 07:00 BST and falling to just above the $77.00/bbl handle at 11:15 BST (time of writing). Price action has been weak amid a continuing lack of confidence in China’s economic stimulus to combat deflation and increases in Libyan crude output. In the news today, the National Oil Corporation (NOC) stated that Libyan crude production has recovered to 1.3mb/d, reaching levels seen before the political dispute over Libya’s central bank. In other news, the US said it will send US troops to Israel along with an advanced anti-missile system. US President Biden has stated that this decision was meant to “defend Israel”, according to Reuters. US officials have yet to announce how quickly their forces will be deployed. Finally, China’s first ultra-deepwater field, Deep Sea 1, is reported to have produced 9 billion cubic meters of natural gas and 900,000 cubic meters of oil to date, as per Xinhua. This development comes as the China National Offshore Oil Corporation (CNOOC) seeks to reduce the country’s reliance on foreign hydrocarbons. At the time of writing, the front month (Dec/Jan’25) and six-month (Dec/Jun’25) Brent futures spreads are at $0.38/bbl and $1.80/bbl, respectively.
