10 January 2025: 16:30 GMT
Red Alert: British Gas owner Centrica has warned us gas in storage runs out in a week. Nice knowing you all. But we can still have a taste of $80 oil before we tuck in for the endless frozen night. Brent burst through $80 after 2 pm in London and broke up to peak at $80.67/bbl by around 230 pm in a frantic surge. However, the over-$80 period lasted just 40 minutes. It felt like flat price was ticking a 2025 accomplishment off its inhabitants bucket list and was happy to get it out of the way before returning to normal 70s service, albeit very elevated in the upper range. The Brent flat price surge sent shockwaves through the entire oil complex. The front month Brent spread threatened to break $1, but never quite made it.
Refining margins held surprisingly steady, supported by great strength in diesel, with the front month gasoil and heating oil cracks both rising around 7% today (remember the cold 🥶!). This offset gasoline’s weakness. A freight trader noted a sudden jump in spot VLCC rates as the March WTI/Brent spread overextended. Indeed, March WTI struggled to keep up with Brent’s extraordinary move, with the spread trading down from around -$3.72 to a low of -$3.96 at 13:00 GMT before WTI staged a minor comeback and the March spread closed at -$3.89.
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