Reports

Nov’24 Brent futures flat price has plunged below $70/bbl this afternoon for the first time since December 2021, pricing at $71.20/bbl at 12:00 BST and reaching a high of $71.81/bbl at 14:30 BST, before diving down to $68.97/bbl at 17:30 BST (time of writing). The sell-off may have been exacerbated by a large number of longs stopping out, especially as prices fell below the $70/bbl psychological level. This comes amid expectations of ample supplies and demand concerns amid weak economic data out of vital economies such as China. In August, Chinese imports increased by just 0.5%, missing expectations for a 2% boost, and down from 7.2% growth a month prior. In the news today, OPEC lowered their global oil demand forecast for 2024 again from 2.11 mb/d to 2.03 mb/d. Until last month, OPEC kept the forecast unchanged since it was first made in July 2023. OPEC also cut its 2025 global demand growth estimate to 1.74 mb/d from 1.78 mb/d. Prices slid on the weakening global demand prospects and expectations of oil oversupply. Meanwhile, the EIA’s forecast for Brent crude oil prices reaching $84.44/bbl in 2024 has been lowered to $82.80/bbl. Correspondingly, their forecast for 2025 has been reduced from $85.71/bbl down to $84.09/bbl. Finally, Tropical Storm Francine continues to barrel across the Gulf of Mexico and is on track to become a hurricane this week. Still, we have yet to see any robust indication of how this hurricane could impact US oil supplies. At the time of writing, the front month (Nov/Dec’24) and six-month (Nov/May’25) Brent futures spreads are at $0.42/bbl and $0.96/bbl, respectively.

Nov’24 Brent futures flat price was volatile this afternoon, pricing at $71.68/bbl at 12:00 BST, with a high of $72.07/bbl at 12:53 BST and low of $70.68/bbl at 12:54 BST, before climbing to $71.94/bbl at 17:45 BST (time of writing). In the news today, tropical storm Francine has formed over the Gulf of Mexico and is set to hit the upper Texas and Louisiana coasts as a hurricane later this week. In response, Shell has paused drilling operations at its Perdido and Whale offshore platforms, both in the storm’s path according to Reuters. Exxon has also temporarily halted operations at the Hoover oil platform, offshore Texas. Meanwhile, the port of Freeport in Texas has decided to remain open to seaborne commercial traffic, on the condition that vessels report their movements. In other news, the ongoing shutdown of Libyan oil exports is propping up several light crude oil grades, including WTI Midland. European imports of WTI Midland have increased 24% m/m in August, reaching 1.43 mb/d. The US crude could replace lost volumes of Libyan crude in the short term, whilst Azeri and Algerian Saharan Blend will be refiners’ top choices for Libyan substitutes for October, according to Rystad Energy. Finally, Indian demand for oil products is down in August by 2.6% y/y as heavy rainfall has dampened diesel demand (-2.4% y/y). At the time of writing, the front month (Nov/Dec’24) and six-month (Nov/May’25) Brent futures spreads are at $0.45/bbl and $1.22/bbl, respectively.

Nov’24 Brent futures flat price took a steep decline this afternoon, pricing around $72.70/bbl at 12:00 BST followed by a high of $73.50/bbl at 14:50 BST before plummeting to $70.82/bbl at 17:15 BST (time of writing). In the news today, Iran’s crude oil exports were reduced to around 3.3 mb/d last month in compliance with OPEC+ supply restrictions, compared to an output of 3.48 mb/d in July. The Iraqi oil ministry has said the country will maintain a reduced level of oil exports in coming months, according to Reuters. In other news, state-owned Saudi Aramco lowered the OSP of its Arab Light crude for buyers in Asia by 70 cents to $1.30/bbl, according to a price list by Bloomberg. Finally, Nigeria’s new upstream deal with Italian energy major Eni plans to boost its production output to 2 mb/d by the end of 2024, Nigeria’s Minister of State Petroleum Resources said. At the time of writing, the front month (Nov/Dec’24) and six-month (Nov/May’25) Brent futures spreads are at $0.33/bbl and $0.88/bbl, respectively.