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Overnight & Singapore Window: Brent Declines to $74.00/bbl Level

The Dec’24 Brent futures contract saw weakness this morning, trading from $74.76/bbl at 07:00 BST and declining to $74.06/bbl at 11:15 BST (time of writing). Prices lacked strength this morning amid reports of Chinese oil refining falling to a three-month low of 58.7 million tons, a reduction of 1.6% y/y, according to Bloomberg. In the news today, Israeli authorities have released a drone video allegedly displaying Hamas leader Yahya Sinwar dying in the ruins of building in southern Gaza, as per Reuters. Following Sinwar’s death, Israeli Prime Minister Netanyahu has promised to continue conflict in Gaza and Lebanon. In other news, Chevron and the Nigerian National Petroleum Company (NNPC) have made a new oil discovery in the Niger Delta, according to S&P Global. Chevron has yet to offer information on potential production targets or a timeline for facility operations. Finally, Russian oil producer Lukoil stated that the company had no plans to buy back shares from foreign investors after requesting permission from the government to buy back 25% last year, Russia’s Deputy Finance Minister Alexei Moiseev said. At the time of writing, the front month (Dec/Jan’25) and six-month (Dec/Jun’25) Brent futures spreads are at $0.43/bbl and $1.62/bbl, respectively.

Trader Meeting Notes: Geopolitical Merry-Go Round

Dec’24 Brent futures fell from close to $80.00/bbl to $74.00/bbl this week as the geopolitical risk premium was priced-out and back in at a rate that puts no one’s mind to rest. As soon as part of the premium has been chipped out of the price, mid to low-70s were not far behind, and they must feel at home. Volatility has dropped as $74.00/bbl has proven less mean-reverting and more mean-unwavering, with Dec’24 trading between $73.50/bbl and $75.00/bbl for a few days. The Washington Post seems confident in Iran’s energy security, although this was a bit undermined by Netanyahu purposefully undermining it and reminding the international community that they will act however they feel ‘necessary’. Chinese news, positive or negative, has taken a breather this week. The geopolitical tension is with all hopes of de-escalating, leaving little to distract from the supply/demand that the market has been happy to pin at mid-70s.

European Window: Brent Weakens To $74.10/bbl

The Dec’24 Brent futures contract strengthened marginally this afternoon, trading at $73.96/bbl at 12:00 BST and reaching $74.20/bbl at 17:50 BST (time of writing). We saw volatility in price action throughout the afternoon amid the release of the IEA October oil market report, alongside concerns of conflict escalation in the Middle East. In the news today, the IEA has released their oil market report for October, showing global oil demand is set to increase by just 862kb/d this year due to decelerating demand in China. This latest estimate is down from the 903kb/d forecast published in the September IEA report. In other news, Israeli troops have begun clearing landmines near Golan Heights, signalling a potential expansion of ground operations against Hezbollah for the first time further east along Lebanon’s border, according to Reuters. Finally, Russian refinery maintenance has pushed the country’s oil exports to their highest level in three months. Average oil exports inched up by 7kb/d to 3.33mb/d in the four weeks to 13 Oct, as per data compiled by Bloomberg. At the time of writing, the front month (Dec/Jan’25) and six-month (Dec/Jun’25) Brent futures spreads are at $0.37/bbl and $1.53/bbl, respectively.

Overnight & Singapore Window: Brent Weakens Marginally To $74.35/bbl

The Dec’24 Brent futures contract weakened amid choppy price action from $74.39/bbl at 07:00 BST to $74.35/bbl at 11:25 BST (time of writing). Price action showed volatility throughout the morning while Iran issued a warning to Israel against retaliation for Iran’s 01 Oct missile attack. In the news today, the commander of Iran’s Revolutionary Guards, Hossein Salami, stated in a televised speech: “if you (Israel) commit any aggression against any point, we will painfully attack the same point of yours”. Meanwhile, Israel has intensified strikes on Eastern Lebanon, with the town of Al-Khiam hit by seven airstrikes in less than 10 minutes last night, according to the state-affiliated National News Agency. In other news, Oman’s state-owned upstream oil and gas operator, OQ Exploration and Production Company (OQEP), raised over $2 billion from its IPO on the Muscat Stock Exchange. According to Bloomberg, the OQEP deal is the biggest Gulf IPO since the $2.5 billion share sale of Adnoc in 2023. At the time of writing, the front month (Dec/Jan’25) and six-month (Dec/Jun’25) Brent futures spreads are at $0.44/bbl and $1.72/bbl, respectively.

CFTC Predictor: Bulls On Their Way Out?

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.

European Window: Brent Climbs To $74.32/bbl

Overnight & Singapore Window: Brent Falls Below $74/bbl

The Dec’24 Brent futures contract continued to weaken this morning, falling from $74.80/bbl at 08:25 BST to briefly dropping below $74/bbl at 10:20 BST. While the benchmark crude futures contract found support here, it fell to $73.88/bbl at 11:35 BST (time of writing).

Gasoline Report: RBBR Hits the Road

The gasoline market has shown good strength in the past two weeks. The Dec’24 RBBR rose from below $8.00/bbl on 1 Oct to a high of over $10.25/bbl on 11 Oct before it softened to $9.85/bbl on 15 Oct. The US and European gasoline structures were supported as we began to enter refinery maintenance season, which could have allowed for the buildup of 5.81mb in crude inventories and a draw of 6.3mb in gasoline stocks, with RBBR seeing particular support in the US open. EBOB spreads saw great strength as the Nov/Dec’24 rallied from a fortnightly low of $10.75/mt on 2 Oct to $20.50/mt on 11 Oct, where it has been very flat since.

European Window: Brent Futures Rises To $74.20/bbl

Dated Brent Report – A (North) Sea of Bears

The water has been anything but calm here in the North Sea, with the Dated Brent complex surging up into October amid a more robust futures complex and supported physical differential.

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