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European Window: Brent Recovers To Mid-$78.60/bbl

The Dec’24 Brent futures flat price recovered this afternoon after initial weakness, amid Iran’s threat to target Israeli gas infrastructure should conflict erupt. The Dec’24 contract traded at $78.63/bbl at 12:00 BST and dipped to $77.84/bbl around 13:20 BST, before strengthening to $78.66/bbl at 17:30 BST (time of writing). Prices have been volatile throughout the afternoon following Iran’s call for a Gaza/Lebanon ceasefire and the release of US NFP data at 13:30 BST, showing a 245k increase in jobs for September, significantly higher than expected. In the news today, Iran’s foreign minister Abbas Araqchi in Beirut said that the Iran will support a ceasefire on the condition it is backed by Hezbollah and synchronized with an end to conflict in the Gaza Strip. Concerns are mounting over the feasibility of this ceasefire, as Israel hits Beirut today with one of its heaviest airstrikes yet. In other news, Brazil’s state-owned oil giant Petrobras is redeveloping the Tupi oil field, one of the largest deep-water reserves globally currently producing over 760kb/d. Petrobras has outlined plans to enhance extraction rates at Tupi and is considering adding another production unit, estimated to cost $4 billion to install. 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 $2.63/bbl, respectively.

Fuel Oil Report – Volat-oil Markets

In high sulphur fuel oil, we saw some greater strength in the European HSFO complex. The Oct’24 3.5% Barges crack climbed from -$13.55/bbl on 2 Sep to -$9.05/bbl by 19 Sep, fuelled by trade houses adding 535kb of longs and hedge funds boosting their position to a net 158kb.

Overnight & Singapore Window: Brent Strengthens To $78.94/bbl

The Dec’24 Brent futures contract found strong support this morning, trading at $77.50/bbl at 07:00 BST and strengthening to around $78.94 at 11:45 BST (time of writing). Price action began moving upward shortly after 08:00 BST amid Israeli airstrikes in Beirut targeting Hezbollah leadership and growing anticipation of a potential attack by Israel on Iranian oil infrastructure. In the news today, Iran’s empty oil tankers previously sitting at an anchorage area near Kharg Island have now left, as per ship tracking data compiled by Bloomberg. In other news, Libya has restarted oil production as the two rival government factions reached an agreement on the governorship of the Central Bank. According to Reuters, Libyan output was 1.2mb/d before the production halt in late August at the Sharara, El Feel, and Essider oilfields. Finally, Spain’s crude oil imports from Venezuela have reached 2 million tons in total this year, just shy of the 2.1 million ton 15-year high. At the time of writing, the front month (Dec/Jan’25) and six-month (Dec/Jun’25) Brent futures spreads are at $0.65/bbl and $2.43/bbl, respectively.

Trader Meeting Notes: What a Whole Load of Bull

Brent briefly dipped back into the infamous $60/bbl handle on Monday, only to rebound sharply over $75/bbl as sentiment took a volte-face on fears of a potential oil supply disruption stemming from the regional escalation of the war in the Middle East.

European Window: Brent Rallies Over $77

Dec’24 Brent futures flat price rallied this afternoon, from $75.65/bbl at 14:00 BST to over $77.00/bbl at around 17:00 BST, currently at $77.15/bbl at 17:20 BST (time of writing). Prices jumped this afternoon as President Biden was asked if he would support Israel striking Iran’s oil facilities and responded: “We’re discussing that”. BoE Governor Andrew Bailey told The Guardian that while the absence of a significant oil price surge has been helpful for monetary policy, the situation in the Middle East must be closely monitored as it could worsen. Reflecting on past oil crises like in the 1970s, he claimed there seems to be a strong commitment in the region to maintain market stability. Libya is resuming oil production after a month-long halt due to political conflict, Oil Minister Khalifa Abdul Sadiq told Bloomberg. This will add a maximum of 260kb/d. Initial jobless claims for the week ending September 28 rose to 225k, surpassing the expected 221k. This is ahead of tomorrow’s September jobs report. At the time of writing, the front month (Dec/Jan’25) and six-month (Dec/Jun’25) Brent futures spreads are at $0.49/bbl and $1.85/bbl, respectively.

CFTC Predictor: Exodus of Bulls in Brent

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.

Overnight & Singapore Window: Brent Futures Rises To $75.34/bbl

The Dec’24 Brent futures flat price this morning climbed from $74.75/bbl at 07:00 BST up to $75.34/bbl at 11:20 BST (time of writing), with a low of $74.33/bbl at 10:05 BST and high of $75.40/bbl at 10:40 BST. This upward price action could in part be influenced by widening of conflict in the Middle East. In the news today, the Israeli Air Force has struck a military depot in Syria in the vicinity of Russia’s Khmeimim air base. The operation reportedly was aimed at disrupting shipments of weaponry intended to be delivered to Hezbollah. Meanwhile, the US and other G7 countries have warned Israel against strikes on Iranian nuclear facilities. In other news, maintenance repairs for Kazakhstan’s 400kb/d Kashagan refinery have been postponed and are now due to start 7 Oct and last 30 days, the energy ministry has said to Reuters. Finally, Total has shut an unspecified unit at its 240kb/d Gonfreville refinery for maintenance. 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 $1.37/bbl, respectively.

European Window: Brent Sells-Off To $73.81/bbl

Dec’24 Brent futures flat price saw a sell-off this afternoon, trading at $75.84/bbl at 12:00 BST and steadily descending to $73.81/bbl at 17:15 BST (time of writing). The downward price action came amid the release of EIA data today at 15:30 BST for the week ending 27 Sep, which showed that US crude oil inventories increased by around 3.89mb, significantly higher than the expected draw of 1.3mb. In the news today, Israel suffered the heaviest losses on the Lebanon front in the past year, according to Reuters, with eight Israeli soldiers killed today in south Lebanon and reportedly three Israeli Merkava tanks destroyed by Hezbollah. In other news, the OPEC+ joint ministerial monitoring committee meeting (JMMC) left the current output cut policy unchanged and emphasised the need for compliance from OPEC+ members with planned cuts. Finally, 45,000 US longshoremen working at US East and Gulf Coast ports have been backed by the White House, with Biden pressing port employers to offer a ‘strong and fair’ contract, as per Reuters. Despite this, there are currently no negotiation talks scheduled between the United States Maritime Alliance (USMX) and the International Longshoremen’s Association (ILA). 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 $1.23/bbl, respectively.

Overnight & Singapore Window: Brent Hits $75.73/bbl

Amid escalating geopolitical tensions in the Middle East, the Dec’24 Brent futures contract saw flat price steadily climbing this morning, trading at $74.80/bbl at 07:00 BST and hitting $75.73/bbl at 11:30 BST (time of writing). In the news today, Israel’s foreign ministry has barred UN Secretary General Antonio Guterres from entering the country due to his alleged failure to “unequivocally condemn” Iran’s attack on Israel, according to Reuters. Whilst anticipation of a retaliatory attack against Iran mounts, Israel has increased military presence in Lebanon, with regular infantry and armoured units joining ground operations. In other news, Saudi Arabia’s oil minister has stated that crude prices could drop to as low as $50/bbl if OPEC+ members do not conform to agreed-upon production limits. Finally, despite pressure from the China, Malaysia has reportedly stepped up oil exploration in the South China Sea, which is estimated to contain 11 billion barrels of untapped oil and 37% of the world’s maritime crude, as per data by Bloomberg. At the time of writing, the front month (Dec/Jan’25) and six-month (Dec/Jun’25) Brent futures spreads are at $0.45/bbl and $1.49/bbl, respectively.

Dated Brent Report – It’s choppy in the North Sea!

The North Sea is choppy as we enter October, and choppiness dominated the Dated Brent market this fortnight, with few signs of this ending. In the last report, the physical diff was strong above a dollar, with a Chinese bull play holding strength and bidding was seen in a few grades. 20 Sep seemed a turning point for the market with BP offering Brent, although PI lifted this. The following week (23-27 Sep) saw strong selling from the US, with Exxon offering Forties and ConocoPhillips offering Ekofisk, with Ekofisk key to setting the curve currently. This US offering helped the phys diff be implied at less than a dollar on 25 Sep and, combined with futures selling, Dated took a dive. In October, following a fairly weak expiry, there is decent strength held in the Dated complex, as PI flipped to selling the diff fell to 65c, where it has been implied steadily. The past few windows have been pretty quiet. PI has stopped its buying and US selling is quieter. The waters are choppy and not so busy.

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