Brent/Dubai witnessed a turbulent week despite the quiet backdrop of Golden Week in China. The complex first saw support towards the end of September amid news of a long-awaited stimulus package announced by the People’s Bank of China on 24 Sep….
Over the past week, the Dated Brent market has been volatile and at the mercy of Brent futures momentum. Structure has firmed and weakened alongside the fluctuations of the futures market, where the increasing geopolitical risk premium and the perceived threat of potential Israeli retaliation against Iranian oil infrastructure, bolstered by the unwinding of short positions, helped propel flat price above $80/bbl on 7 Oct. However, price action weakened on 8 Oct, likely on profit-taking flow as traders took stock of bearish factors, including macroeconomic considerations, with the market tentative on China as its government holds off on fiscal stimulus, alongside perennial speculation on OPEC+ supply management decisions.
Amid choppy price action this morning, the Dec’24 Brent futures contract weakened a touch from $79.65/bbl at 07:00 BST to $79.43/bbl at 11:50 BST (time of writing). After briefly trading above the $80/bbl level yesterday, the contract saw less support alongside increasing Libyan output and changing risk of regional escalation of war in the Middle East, as traders continue to wait for Israel’s potential retaliation on Iran. However, downside pressure was limited by production shut-ins in the US Gulf Coast caused by Hurricane Milton. In the news today, Iran’s foreign minister Abbas Araqchi has warned Israel against any potential attack on Iranian infrastructure, stating that any Israeli incursion would be met with a stronger retaliation. In other news, Hurricane Milton, now a Category 5 storm, is expected to make landfall tomorrow in the Tampa Bay area of Florida. Chevron has shut in its Blind Faith platform in response, whilst the rest of its Gulf of Mexico assets remain operational. Finally, China has said that is ‘fully confident’ in reaching its annual growth target of 5%, according to Reuters. Zheng Shanjie, the Chairman of the National Development and Reform Commission announced a government plan to issue $28.3 billion in advance budget spending from next year, however, to the disappointment of investors seeking a greater fiscal stimulus. At the time of writing, the front month (Dec/Jan’25) and six-month (Dec/Jun’25) Brent futures spreads are at $0.51/bbl and $2.25/bbl, respectively.
Another week brings another selection of new trade ideas from Onyx Research, this time looking at trades in crude, distillates, and naphtha 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 witnessed a strong afternoon, recording a 2.5% increase to $80.80/bbl between 14:00 BST and 17:00 BST before softening a little to $80.70/bbl as of 17:35 BST (time of writing). T
Much To Do About China – Front-month ICE Brent futures shifted gears twice, moving into a lower trading range in September, with Brent pricing still very much at the mercy of the macro sentiment, centred on China. At the peak of Chinese doom and gloom, crystalised during the APPEC industry conference in Singapore, Brent briefly traded under $70/bbl during 10-11 September, before geopolitics centred around Iranian missile strikes on Israel lifted prices at the start of October just above $80/bbl. For now, Brent’s 70s range is still the new 80s, assuming no further escalations of tensions in the Middle East. One red flag in the oil price recovery towards the mid-70s, prior to Iran’s attack on Israel, is that it took place with risk-takers on the sidelines. Money managers briefly turned net-short on Brent futures in September, suggesting evident hesitancy in gaining exposure to oil. There needs to be a catalyst to unlock risk appetite, whether the catalyst is fundamental, geopolitical, or financial…
For the week to 01 Oct, money-managed positions saw mixed interest across Brent and WTI crude futures, while price action in both futures contracts found support this week. We saw combined money managed long positioning in Brent and WTI futures increase by a modest 3.24mb (+1.0%) while combined short positioning increased by around 4.12mb (+2.1%). Overall, the combined Brent+WTI managed by money long:short ratio decreased from 1.80:1.00 to 1.78:1.00 in the week ending 01 Oct.
The Brent futures complex saw a substantial rally over the past week as price action surged on heightened geopolitical risk. Following Israel’s expansion of the war into Lebanon, Iran deployed ballistic missiles toward Israel on 1 October, marking a substantial escalation of the conflict. With Israel mulling its response and ahead of the 7 Oct anniversary of the Hamas attack, the market has been extremely wary, especially if regional oil production, infrastructure, and transportation are disrupted.
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
The Dec’24 Brent futures contract firmed up this morning, strengthening from $77.80/bbl at 07:00 BST to $79.85/bbl at 11:20 BST (time of writing). Price action saw upward movement amid US strikes on Houthi rebels in Yemen over the weekend, alongside a Hamas missile attack on Tel Aviv this morning, on the 7 October anniversary of the Hamas attack. In the news today, after Israel hit Beirut on Sunday with the heaviest night of airstrikes yet, Hamas has fired missiles past Israeli defences into Tel Aviv, triggering air raid sirens according to Reuters. In addition, Hezbollah rockets have targeted a military base south of Haifa, Israel’s third largest city, reportedly wounding eight people. In other news, on Friday, the US military said it carried out 15 strikes on Houthi targets in Yemen. Central Command, which oversees US forces in the Middle East, said the attacks were aimed at limiting Houthi offensive capabilities, as per Reuters. Finally, the explosion of an oil tanker near the international airport of Karachi, Pakistan, has been determined to be a terrorist act according to the regional internal affairs minister. A Chinese Embassy statement has said that a convoy carrying Chinese staff of the local Port Qasim Electric Power Company was engulfed in the blast, believed to have killed two workers from China. At the time of writing, the front month (Dec/Jan’25) and six-month (Dec/Jun’25) Brent futures spreads are at $0.66/bbl and $2.66/bbl, respectively.
