This week, the North Sea physical market saw the largest amount of cargoes traded in 16 years, with 8 cargoes, or approximately 5.6mb of crude, changing hands in this Monday’s pricing window (2 Dec). With large market players Trafigura and Total going head to head for bids, we await to see if this spurt of buying will continue throughout December and lend further support to the Dated Brent market. In other news, 5 Dec’s OPEC+ ministerial meeting has been a key focus throughout the week with the cartel now delaying its production hike by three months, previously scheduled to begin in January with an increase of 180kb/d. Instead, the revival of its oil production will start in April and unwind output cuts at a slower rate than planned. Whether this move is enough to keep crude prices sustained above $70/bbl remains to be seen, with continuing Chinese oil demand concerns blighting the global demand growth forecast. In addition, the market appears to be unbothered by geopolitical tensions in the Middle East following the Israel-Hezbollah ceasefire, with both sides exchanging accusations of violating the peace deal. However, the Russia-Ukraine conflict poses more of a risk as Russia continues to directly target Ukrainian energy infrastructure, while Ukraine struck Russia’s Atlas oil depot in the Rostov region this week, showing the potential for supply disruption remains.
