Reports

The Feb’25 Brent futures flat price continued to slide on Monday afternoon, falling from the $72.70/bbl level at 11:00 GMT to $72/bbl by 16:50 GMT, before finding technical support and bouncing up to $72.12/bbl by 17:20 GMT (time of writing). In the news, India’s crude imports in November saw Middle Eastern oil rise to a 9-month high, accounting for 48%, while Russian oil fell to its lowest share in three quarters at 32%, driven by refinery maintenance and adherence to Middle Eastern supply contracts. Efforts to broker a Gaza ceasefire have gained momentum, with progress on key issues like prisoner exchanges and troop deployment, but major sticking points, including the duration of the ceasefire and the broader terms for ending the war, remain unresolved amid dire humanitarian conditions in the region. According to an EIA article, improved operational efficiency and technological advancements have enabled U.S. crude oil production in the Lower 48 states to reach a record 11.3 mb/d in November 2024, despite a declining rig count, with productivity per rig expected to rise further in 2025 due to continued innovation and new pipeline capacity. US SPR crude inventories rose by 0.3mb w/w to 393.3mb last week. Finally, the front (Feb/Mar) and 6-month (Feb/Aug) Brent futures spreads are at $0.29/bbl and $1.55/bbl respectively.

Feb’25 Brent futures failed to break through support at $72.00/bbl throughout this afternoon and rose to $73.00/bbl at 1720 GMT (time of writing). Kremlin spokesman Dmitry Peskov warned that potential G7 sanctions on Russia’s oil industry could destabilise global energy markets and prompt Russian countermeasures. Proposed measures include reducing the price cap on Russian oil from $60 to $40/bbl or banning its transportation and insurance, though no decision has been finalised. According to data from China’s General Administration of Customs, Russia increased oil exports to China by 1.65% year-on-year to 99 million tons from January to November, valued at $57.4 billion (+4.7%). The EIA forecasts U.S. energy consumption rising from 93.69 qBtu in 2023 to 95.15 qBtu in 2025, with liquid fuels averaging 20.29 mb/d in 2024 and 20.53 in 2025 and natural gas at 90.5 and 90.2 billion cubic feet/day, respectively. Russia remains China’s top oil supplier, followed by Saudi Arabia and Malaysia. Presidents Putin and Xi emphasised strengthening energy cooperation during their May meeting. At the time of writing, the front (Feb/Mar’25) and 6-month (Feb/Aug’25) Brent Futures spreads are at $0.39/bbl and $1.89/bbl, respectively.

Feb’25 Brent futures fell from $73.70/bbl at 13.30 GMT to $72.70/bbl at 17:00 GMT. A US government shutdown is looming as Congress scrambles to pass a stopgap bill, despite opposition from President-elect Donald Trump, according to Fox News. Economic data showed jobless claims dropped to 220,000 (below estimates) from 242,000 the previous week. US GDP saw annualised growth of 3.1% in Q3, and the Philadelphia Fed survey plunged to -16.4, compared to the predicted +3.0. BP and Iraq have agreed on key technical terms for redeveloping Kirkuk’s oil and gas fields, which still contain billions of barrels of recoverable oil. According to BP, a full contract is expected to be finalized by early next year. Oil operators in North Dakota, the third-largest oil-producing state in the US, are still working to restore facilities after October wildfires impacted key production areas. The fires caused a loss of 520kb and a decline in output to 1.178 mb/d from 1.2 mb/d in September. According to Sinopec, China’s oil consumption is projected to peak by 2027 at 800 million metric tons, equivalent to 16 million barrels per day. They say the decline in diesel and gasoline demand is driving the slowdown in the world’s largest oil importer. At the time of writing, the front (Feb/Mar’25) and 6-month (Feb/Aug’25) Brent Futures spreads are at $0.40/bbl and $1.78/bbl, respectively.

The Feb Brent Futures contract has seen mixed price action this afternoon, trading up to a high of $74.12 at 16:10 GMT before retracing to $73.61/bbl where it sits at the time of writing, as EIA data highlighted that crude inventories fell by 934kb to 421mb in the week, compared with analysts’ expectations in a Reuters poll for a 1.6mb draw. In headlines, Saudi Arabia’s crude oil exports rose to a three-month high in October, reaching 5.92 mb/d, up 174 kb/d from September, according to JODI data. Despite the increase in exports, crude production slightly declined to 8.972 mb/d as the Kingdom adhered to its pledge to produce “around 9 mb/d.” Meanwhile, Barclays downgraded the energy services sector from positive to neutral, citing a bearish oil macro environment, limited investor capital influx, and potential risks to 2025 earnings. The sector, after three years of double-digit growth, is now experiencing a mid-cycle spending plateau. At the time of writing, the front (Feb/Mar’25) and 6 month (Feb/Aug’25) Brent Futures spreads are at $0.38/bbl and $1.64/bbl, respectively.

The Feb’25 Brent futures flat price came off from the $73.20/bbl handle on Tuesday afternoon. Price action fell to lows of $72.50/bbl before recovering to $72.88/bbl by 17:20 GMT (time of writing). In the headlines, the UK imposed new sanctions on two oil trading firms, 2Rivers DMCC and 2Rivers Pte Ltd, and 20 shadow fleet vessels to curb Russian oil revenues and disrupt its illicit oil trade. Oil has washed ashore tens of kilometres of Russia’s Black Sea coast after two aging tankers were damaged in a storm, and now a third tanker has issued a distress signal, heightening fears of a worsening environmental disaster. Saudi Arabia has successfully extracted lithium from oilfield brine and plans to launch a commercial pilot program led by Lihytech, showcasing its move toward alternative wealth sources amid rising global demand for battery minerals. Kazakhstan has downgraded its 2024 oil output forecast to 87.8 million tons, citing maintenance at the Tengiz oilfield, with production totalling 80.5 million tons from January to November. Finally, the front (Feb/Mar) and 6-month (Feb/Aug) Brent futures spreads are at $0.32/bbl and $1.41/bbl respectively.