News

European Window: Brent Supported At $75/bbl

The Jan’25 Brent futures contract initially saw weakness this afternoon, trading from $75.25/bbl at 12:00 GMT down to $74.30/bbl around 15:50 GMT, before recovering to $75.15/bbl at 17:45 GMT (time of writing). Despite profit-taking flows, prices overall have been supported following the OPEC+ decision to delay a production hike for another month. In the news today, according to a Reuters survey, OPEC oil output was up 195kb/d in October m/m, with Libya posting the largest gain of up to 400kb/d. Crude oil production in Venezuela reached 860kb/d, the highest since at least 2020, while Iraq cut crude oil output by 120kb/d, amid lower exports and domestic consumption. In other news, developing Tropical Storm Rafael is projected to strengthen into a hurricane late Tuesday as it moves northwest from the Caribbean towards offshore oil production areas in the Gulf of Mexico, as per the US National Hurricane Center. Finally, according to Argus Media, Asia-Pacific refiners have increased their intake of US light sweet WTI for November loading, buying around 1.3mb/d of WTI loading compared to roughly 800kb/d in October and could remain keen buyers in December. Meanwhile, European demand for crude is expected to rebound in December following the end of autumn refinery maintenance, with Ekofisk adding around 60c/bbl relative to WTI since mid-October. At the time of writing, the Jan/Feb’25 and Jan/Jul’25 Brent futures spreads stand at $0.42/bbl and $1.57/bbl, respectively.

CFTC Weekly: Bulls In Brent Deflate

In the week ending 29 October, Brent and WTI futures inched up but then saw pressure as they gapped down on 28 Oct as the risk premia built into their flat prices saw a significant reduction due to the Israeli strikes on Iranian military sites being seen as non-excitatory. Both WTI and Brent gapped down on the open, and there was better support at these lower levels. The geopolitical landscape has changed to feel less risk-on, although the rhetoric from Iran has ramped up a bit this week. Still, it will not be represented in the COT data next week.
Both WTI and Brent saw an increase in short positions for the second consecutive week, with their total open interest increasing by over 2.00% (82.9mb). Short interest from funds in Brent Futures by around 9.8mb (11.05%) and a 16.8mb (28.0%) drop in short interest in WTI. The long:short ratio fell from 2.47:1.00 to 2.07:1.00 w/w (7th percentile for all weeks since 2013). Prod/Merc players continued to have a risk-on week, with both longs and shorts increasing their positions by 64mb and 36mb respectively.

Brent Forecast: 4th November 2024

Brent crude futures have been trading higher at the start of November, with prices in the Jan’25 contract trading above $74/bbl as of Monday morning. Price action was supported as market participants remain on edge over the conflict in the

Futures Report: America’s Choice

The Jan/Feb’25 Brent futures spread recovered from an intraday low of $0.30/bbl on 29 Oct to an intraday high of $0.46/bbl on 01 Nov, where it met resistance. This recovery emerged amid Iran threatening to retaliate against Israel’s attack, injecting further risk into the market.

Overnight & Singapore Window: Brent Finds Strength At High $74/bbl Levels

After rallying at market open this week from $72.90/bbl on 01 Nov to $74.35/bbl last night, the Jan’25 Brent futures contract showed steady support this morning, climbing from $74.40/bbl at 07:00 GMT up to $74.70/bbl just after 10:40 GMT (time of writing). Crude oil prices were elevated amid an OPEC+ decision on Sunday to extend its output cut of 2.2mb/d by another month, initially planning to increase production in December. In the news today, according to a Reuters report, Israel has officially notified the UN that it is cancelling the agreement that regulated relations with the UN relief organization for Palestinian refugees (UNRWA) since 1967, fuelling concerns of a worsening humanitarian situation in Gaza. This came as Palestinian medics claimed Israeli airstrikes killed at least 31 people in the Gaza strip on Sunday. In other news, China’s refining output is set to fall to 14.7mb/d this quarter on thin margins and weak demand, in addition to maintaining lower run rates in Q1’25, as per Reuters. Finally, Eni has sold $1 billion worth of upstream offshore assets in Alaska to US private company Hilcorp, planning to raise €8 billion in net proceeds between 2024-2027 to fund the growth of its low-carbon units. At the time of writing, the Jan/Feb’25 and Jan/Jul’25 Brent futures spreads stand at $0.41/bbl and $1.42/bbl, respectively.

European Window: Brent Futures Declines to $73.30/bbl

The Jan’25 Brent futures contract weakened this afternoon, moving from the $74.30/bbl level at 12:00 GMT down to $73.30/bbl at 17:30 GMT (time of writing). Crude oil prices sold-off 80c just after 14:20 GMT, declining to $73.47/bbl at 14:50 GMT, amid the release of US manufacturing PMI data at 14:00 GMT showing a contraction to 46.5 in October, compared to a forecast of 47.6. In the news today, according to a Bloomberg report, oil supplies from OPEC increased by 370kb/d to 29.9mb/d in October, with Libya adding 500kb/d after the end of the central bank feud and Iraq cutting 90kb/d. In other news, Venezuela’s oil exports have reached a four-year high, approaching 950kb/d in October, as per Reuters. The boost in oil exports is the result of increased crude output and more sales to India and the US, according to ship tracking data. Finally, Exxon reported $8.61 billion in their Q3-24 earnings, down 5% y/y, while hitting a 40-year liquids production high at 3.2mb/d. Meanwhile, Exxon has sold the Fos-sur-Mer refinery in France to a consortium composed of Entara and Trafigura. At the time of writing, the Jan/Feb’25 and Jan/Jul’25 Brent futures spreads stand at $0.38/bbl and $1.27/bbl, respectively.

Fuel Oil Report – Very Volatile Low Sulphur Fuel Oil (VVLSFO)

In High Sulfur Fuel Oil (HSFO), the huge 3.5% rally may have stalled, with the front crack reaching a new high of -$7.10/bbl on 30 Oct. The strength seems to have softened since, with Dec’24 dropping to -$8.55/bbl on 1 Nov. Dec’24 380 E/W fell saw its strength wane, unable to hold rallies above $9.75/mt. Dec’24 E/W open interest dropped to 8.4mb on 15 Oct but rose to 9.5mb by 30 Oct, indicating profit-taking. Dec’24 Visco saw small gains, peaking at $12.50/mt on 1 Nov, with net buying amid low liquidity and minor day-to-day changes.

Brent Review: 1st November 2024

The Risk Premium Rises (Again) On Monday, we held a bearish view of the Jan’24 Brent futures contract and forecast it to end the week between $68-71/bbl. While the futures contract did weaken to an intraday low of $70.28/bbl on

Overnight & Singapore Window: Brent Trades At $74.30/bbl

The Jan’25 Brent futures contract strengthened this morning from $74.05/bbl at 07:00 GMT up to $74.65/bbl at 10:10 GMT, before coming off to around $74.30/bbl at 10:35 GMT (time of writing). Crude oil prices saw support amid reports that Iran is preparing a major retaliatory attack on Israel by proxy from Iraq in the coming days, with US officials continuing to work towards an Israel-Lebanon ceasefire deal in the meantime. In the news today, Israel hit Beirut’s southern suburbs with airstrikes aimed at Hezbollah assets early this morning, in the first such strikes in days targeting the dense urban area. In other news, according to S&P Global, Russia is not planning to lift its gasoline export ban early due to ongoing refinery turnarounds and high retail prices, after Russian officials indicated in September that the ban could be lifted early on the condition of a gasoline surplus. Turnarounds are expected to continue at several Russian refineries into the first half of November, including the Norsi, Ryazan, and Volgograd facilities. Finally, a Ukrainian drone has crashed into an oil depot in Russia’s Stavropol region, reported by a local governor Vladimir Vladimirov on Telegram. This follows yesterday’s drone attack on the Russian region of Bashkortostan, where major oil company Bashneft operates several large refineries. At the time of writing, the Jan/Feb’25 and Jan/Jul’25 Brent futures spreads stand at $0.41/bbl and $1.33/bbl, respectively.

European Window: Brent Supported At $72.75/bbl

After rallying this morning, the Jan’25 Brent futures contract saw continued strength this afternoon, moving from $72.65/bbl at 12:00 GMT up to $73.23/bbl at 15:25 GMT, however, price tapered off to $72.75/bbl by 18:05 GMT (time of writing). Crude oil prices were supported with ongoing uncertainty regarding a potential Israel-Lebanon ceasefire deal. In the news today, the IMF has cut their Middle East GDP growth outlook to 2.1% for this year, slashed by 0.6% from their April forecast. According to the IMF, this comes amid continuing regional conflict and expectations of a delay in OPEC+ oil production cuts. In other news, TotalEnergies missed the analyst estimate of $4.27 billion profit for Q3’24, reporting an adjusted net income of $4.1 billion on weaker refining margins and lower LNG production. Finally, Rosneft’s Tuapse oil refinery, one of Russia’s biggest Black Sea refineries, is due to resume operations in November. The facility was suspended from 1 Oct because of low margins on refined fuels, however, is expected to process about 480,000 metric tons of crude oil next month, as per Reuters. At the time of writing, the Jan/Feb’25 and Jan/Jul’25 Brent futures spreads stand at $0.37/bbl and $1.16/bbl, respectively.

No more posts to show