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The Mar’25 Brent futures flat price saw a volatile and choppier performance amid thinner liquidity on Tuesday, rising to $73/bbl by 11:20 GMT before selling off by 60c within 15 mins, and is printing $72.74/bbl at 13:15 GMT (time of writing). With trading volumes quieter during the holiday period, price action is expected to fluctuate around current levels in the short term, with traders in a tentative and wait-and-see mode ahead of the new year. In the news, Russian President Vladimir Putin has lifted a 2022 ban on transactions involving Rosneft shares, paving the way for potential sales, including stakes in German refineries, amid ongoing sanctions challenges and interest from Middle Eastern investors. Indian state refiners may turn to Middle Eastern spot crude to offset an 8-10mb shortfall in Russian oil for January, driven by rising Russian domestic demand and OPEC commitments, potentially raising costs due to less favourable economics. Indian Oil Corporation will invest 610 billion rupees ($7 billion) in a naphtha cracker project in Paradip, Odisha, with an initial agreement expected to be signed in January, complementing its existing 300kb/d refinery in the region. Finally, the front (Feb/Mar) and 6-month (Feb/Aug) Brent futures spreads are at $0.40/bbl and $1.92/bbl respectively.

The Feb’25 Brent futures flat price continued to slide on Monday afternoon, falling from the $72.70/bbl level at 11:00 GMT to $72/bbl by 16:50 GMT, before finding technical support and bouncing up to $72.12/bbl by 17:20 GMT (time of writing). In the news, India’s crude imports in November saw Middle Eastern oil rise to a 9-month high, accounting for 48%, while Russian oil fell to its lowest share in three quarters at 32%, driven by refinery maintenance and adherence to Middle Eastern supply contracts. Efforts to broker a Gaza ceasefire have gained momentum, with progress on key issues like prisoner exchanges and troop deployment, but major sticking points, including the duration of the ceasefire and the broader terms for ending the war, remain unresolved amid dire humanitarian conditions in the region. According to an EIA article, improved operational efficiency and technological advancements have enabled U.S. crude oil production in the Lower 48 states to reach a record 11.3 mb/d in November 2024, despite a declining rig count, with productivity per rig expected to rise further in 2025 due to continued innovation and new pipeline capacity. US SPR crude inventories rose by 0.3mb w/w to 393.3mb last week. Finally, the front (Feb/Mar) and 6-month (Feb/Aug) Brent futures spreads are at $0.29/bbl and $1.55/bbl respectively.

Feb’25 Brent futures failed to break through support at $72.00/bbl throughout this afternoon and rose to $73.00/bbl at 1720 GMT (time of writing). Kremlin spokesman Dmitry Peskov warned that potential G7 sanctions on Russia’s oil industry could destabilise global energy markets and prompt Russian countermeasures. Proposed measures include reducing the price cap on Russian oil from $60 to $40/bbl or banning its transportation and insurance, though no decision has been finalised. According to data from China’s General Administration of Customs, Russia increased oil exports to China by 1.65% year-on-year to 99 million tons from January to November, valued at $57.4 billion (+4.7%). The EIA forecasts U.S. energy consumption rising from 93.69 qBtu in 2023 to 95.15 qBtu in 2025, with liquid fuels averaging 20.29 mb/d in 2024 and 20.53 in 2025 and natural gas at 90.5 and 90.2 billion cubic feet/day, respectively. Russia remains China’s top oil supplier, followed by Saudi Arabia and Malaysia. Presidents Putin and Xi emphasised strengthening energy cooperation during their May meeting. At the time of writing, the front (Feb/Mar’25) and 6-month (Feb/Aug’25) Brent Futures spreads are at $0.39/bbl and $1.89/bbl, respectively.

Feb’25 Brent futures fell from $73.70/bbl at 13.30 GMT to $72.70/bbl at 17:00 GMT. A US government shutdown is looming as Congress scrambles to pass a stopgap bill, despite opposition from President-elect Donald Trump, according to Fox News. Economic data showed jobless claims dropped to 220,000 (below estimates) from 242,000 the previous week. US GDP saw annualised growth of 3.1% in Q3, and the Philadelphia Fed survey plunged to -16.4, compared to the predicted +3.0. BP and Iraq have agreed on key technical terms for redeveloping Kirkuk’s oil and gas fields, which still contain billions of barrels of recoverable oil. According to BP, a full contract is expected to be finalized by early next year. Oil operators in North Dakota, the third-largest oil-producing state in the US, are still working to restore facilities after October wildfires impacted key production areas. The fires caused a loss of 520kb and a decline in output to 1.178 mb/d from 1.2 mb/d in September. According to Sinopec, China’s oil consumption is projected to peak by 2027 at 800 million metric tons, equivalent to 16 million barrels per day. They say the decline in diesel and gasoline demand is driving the slowdown in the world’s largest oil importer. At the time of writing, the front (Feb/Mar’25) and 6-month (Feb/Aug’25) Brent Futures spreads are at $0.40/bbl and $1.78/bbl, respectively.