Gasoline Report: Up and Down…
The gasoline market saw more resistance this fortnight, with the Nov’24 EBOB crack softening from $7.80/bbl on 19 Sep to $5.80/bbl on 01 Oct (at the time of writing).
News
European Window: Brent Rallies To $74.40/bbl
The Dec’24 Brent futures contract rallied this afternoon, trading at $71.42/bbl at 12:00 BST and reaching $74.40/bbl handles at 17:20 BST (time of writing). Prices have surged amid reports of Iran’s imminent ballistic missile attack on Israel. In the news today, earlier this afternoon White House officials warned that the US has “indications” of Iran launching an attack and that they are actively supporting preparations to defend Israel, according to Reuters. In other news, Iran-aligned Houthi rebels have damaged two commercial vessels in the Red Sea near Al Hodeidah, Yemen earlier today. One of the ships is believed to be the Panama-flagged Cordelia Moon, which was returning to the Mediterranean after delivering Russian oil to India, as per ship-tracking data compiled by Bloomberg. Finally, Russia is set to increase oil exports via its western ports to 2.2mb/d in October, rising 3% m/m, sources close to Reuters stated. At the time of writing, the front month (Dec/Jan’25) and six-month (Dec/Jun’25) Brent futures spreads are at $0.36/bbl and $1.12/bbl, respectively.
Onyx Alpha: Bear….ish
Another week brings another selection of new trade ideas from Onyx Research, this time looking at trades in crude oil futures and gasoline. 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.
Overnight & Singapore Window: Brent Volatile At $71.24/bbl
The Dec’24 Brent futures contract dipped this morning from $71.80/bbl at 07:00 BST to a touch below $70.00/bbl at 10:10 BST, before strengthening and finding support at $71.24/bbl at 11:25 BST (time of writing). This volatile price action comes as Israel launched their ground invasion of southern Lebanon on Monday night. In the news today, Israeli paratroopers and commandos have begun targeting Hezbollah strongholds on the ground. According to Reuters, Israel’s military has stated that the raids will be focused along the border and the incursion does not constitute a war against the Lebanese people. In other news, the US Department of Energy (DOE) has said that 6 mb of crude oil have been bought for the SPR, due to be delivered in quantities of 1.5 mb per month from February through to May 2025. The DOE has bought these barrels at an average price of $68.56/bbl from a combination of Exxon, Shell, and Macquarie. Finally, Germany’s preliminary CPI figures reported inflation has fallen to 1.6% y/y for September, slightly lower than the expected 1.7% and the slowest pace of price growth in over three years. At the time of writing, the front month (Dec/Jan’25) and six-month (Dec/Jun’25) Brent futures spreads are at $0.27/bbl and $0.71/bbl, respectively.
European Window: Brent Recovers To $72.25/bbl
After weakness this morning, the Dec’24 Brent futures flat price recovered this afternoon. Trading a touch above of $71.00/bbl at 12:35 BST, flat price tested the $71.80/bbl resistance level multiple times before finally breaking through around 15:45 BST and reaching $72.25/bbl at 17:30 BST (time of writing). This price action may reflect the increased risk of conflict escalation in the Middle East as Israel threatens a ground invasion in Lebanon. In the news, Libya’s halted oil production is expected to gradually resume on 1 Oct, according to Italian news agency Agenzia Nova. In other news, imports of Iranian crude into China are set to reach a record high of 1.79mb/d for the month of September, according to ship-tracking data by Kpler. Finally, amid a dispute dating back to the 1970s over oil-rich islands in the Gulf of Guinea, a hearing has begun between OPEC members Gabon and Equatorial Guinea at the International Court of Justice to settle maritime boundaries and sovereignty. At the time of writing, the front month (Dec/Jan’25) and six-month (Dec/Jun’25) Brent futures spreads are at $0.28/bbl and $0.72/bbl, respectively.
Futures Report: Rangebound (and Down?)
The Dec’24 Brent futures weekly high of $74.75/bbl on 24 Sep failed to hold, and it fell to $71.40/bbl on 26 Sep before correcting to around $72.50/bbl on 30 Sep with a possibly weak expiry in sight for the Nov’24 contract. It seems it failed again to break out of this rangebound regime that crude has traded in throughout September. For Dec’24 Brent this is between $75.00/bbl and $70.00/bbl.
Brent Forecast: 27th September 2024
We are looking for the front-month December 24 contract to finish the week between $69-74/bbl with the drivers dictating the rangebound regime essentially unchanged: Geopolitical tensions in the Middle East moved a notch higher. Israel has stepped up kinetic action
CFTC Weekly: A Few Good Bulls
Money managers were happy to add buy-side risk in crude oil, when considering the positioning in WTI and Brent in the week ending 24 Sep.
Overnight & Singapore Window: Brent Weakens To $71.54/bbl
Dec’24 Brent futures showed weak upside momentum on Monday, following the confirmation over the weekend of the killing of Hezbollah’s leader, Hassan Nasrallah. Initial strength in the morning took the contract to a high of $72.75/bbl shortly before 07:00 BST, where a correction set in and price decreased to $71.54/bbl at 11:10 BST (time of writing). Despite rising tensions in the Middle East, price action has highlighted that bearish sentiment persists. In the news today, Israel has issued a statement claiming to have bombed Houthi targets in Yemen’s port of Hodeidah on Sunday, killing at least 4 and wounding 29. Meanwhile, Israel has kept up their assault on Lebanon following yesterday’s latest airstrike, resulting in at least 105 casualties according to Lebanon’s health ministry. IDF tanks have now gathered on the Lebanon border as fears over a ground invasion mount. In other news, talks between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) over wage issues in US East and Gulf Coast ports are deadlocked, now reaching the 30 Sep deadline for a contract deal. The strike, which is due to begin on 1 Oct, would be the first coastwide ILA strike since 1977. At the time of writing, the front month (Dec/Jan’25) and six-month (Dec/Jun’25) Brent futures spreads are at $0.25/bbl and $0.58/bbl, respectively.
European Window: Brent Pushes Up To $72/bbl
The Dec’24 Brent futures contract was initially rangebound between $71.00 and $71.50/bbl before dipping to a low of $70.93/bbl around 14:45 BST and strengthening shortly after up to around the $72.00/bbl level at 17:30 BST (time of writing). In the news today, Israeli Prime Minister Benjamin Netanyahu, speaking to world leaders at the UN General Assembly in New York, has vowed the IDF will continue its bombardment of Hezbollah targets in Lebanon and decisively announced there would be no immediate truce. Netanyahu dedicated part of his speech to threatening Iran, stating “there is no place in Iran that the long arm of Israel cannot reach”. In other news, labour strikes at major East and Gulf Coast ports in the US are due to start early next week, with a total of 14 ports and some 25,000 workers involve, according to the United States Maritime Alliance. Finally, Indian refiners are expected to raise their total refining capacity by up to 800 kb/d by the end of the fiscal 2030 year, boosting their base capacity up to 5.92 mb/d, according to data from Crisil Ratings. At the time of writing, the front month (Dec/Jan’25) and six-month (Dec/Jun’25) Brent futures spreads are at $0.32/bbl and $0.74/bbl, respectively.