Reports

The Feb’25 Brent futures contract weakened this morning, increasing from $73.65/bbl at 07:00 GMT up to $73.95/bbl at 09:00 GMT, before falling back down to $73.50/bbl at 10:55 GMT (time of writing). In the news today, Kremlin spokesman Dmitry Peskov said that Russia will respond to Ukraine’s ATACMS strike on Russian territory, as per Reuters. This came as Russia claimed Ukraine targeted a military airfield on the Azov sea with six US-made ATACMS missiles on 11 Dec. In other news, Rosneft has agreed to supply nearly 500kb/d of crude oil to Indian private refiner Reliance in the biggest energy deal ever between the two countries, according to Reuters. The 10-year agreement amounts to approximately 0.5% of global supply and is worth $13 billion a year. Finally, Norway’s Vaar Energi has discovered additional oil reserves in the Arctic Goliat field, with recoverable resources estimated to be between 4 million and 25 million barrels of oil equivalent, the company said in a statement. At the time of writing, the Feb/Mar’25 and Feb/Aug’25 Brent futures spreads stand at $0.40/bbl and $1.59/bbl, respectively.

After trading comfortably around $72.50/bbl overnight, the Feb’25 Brent futures contract has increased to $72.85/bbl this morning at 10:45 GMT (time of writing). Crude oil prices have been supported following the announcement of China’s looser monetary policy stance and expectations of a US Fed rate cut next week. In the news today, the Biden administration is considering harsher sanctions against Russian oil in the leadup to Donald Trump’s inauguration in January 2025. The sanctions could target Russian oil exports according to anonymous sources familiar with the matter, however, no exact details have been specified, as per Bloomberg. In other news, Russian crude oil flows through the Druzhba pipeline to the Czech Republic have continued as normal, operator MERO said following Ukrainian strikes on an oil depot in Russia’s Bryansk region last night, according to Reuters. Finally, Ecuador’s imports of refined products have been rising amid low refinery utilisation rates, with refining throughput for 2024 expected to drop 13.4% in 2024 y/y, as per S&P Global. Ecuador’s oil products imports were recorded at 4.1mb in September, 5mb for October, and 5.2mb in November. At the time of writing, the Feb/Mar’25 and Feb/Aug’25 Brent futures spreads stand at $0.33/bbl and $1.27/bbl, respectively.

The Feb’25 Brent futures contract saw weakness this morning, trading from $71.85/bbl at 07:00 GMT up to $72.20/bbl at 09:00 GMT and falling to around $71.55/bbl at 11:00 GMT (time of writing). In the news today, Israeli airstrikes targeted Syrian military installations and airbases overnight, but denied its forces had advanced into Syria beyond a buffer zone at the border, as per Reuters. Meanwhile, Israeli Prime Minister Netanyahu took the witness stand for the first time in his long-running corruption trial, pleading not guilty to charges of bribery, fraud, and breach of trust. In Russia, Foreign Intelligence Chief Sergei Naryshkin said that Moscow was close to achieving its goals in Ukraine, with Russia holding what he said was the strategic initiative in all areas in the war, as per Reuters. In other news, Iraq has ended the year without finalising a deal with Kurdistan for exports of crude oil from the northern region. MP Jiay Timor from the Kurdistan Democratic Party stated that the delay stems from disagreements over the cost of oil extraction, with the Iraqi government initially estimating the cost at $6/bbl while “foreign companies” estimated the cost to be as high as $26/bbl, according to Shafaq News. Finally, China’s customs data showed oil imports rose to 11.81mb/d in November, the first increase seen in seven months. The total for the month was 48.5 million tons of crude, a 14.3% increase y/y. At the time of writing, the Feb/Mar’25 and Feb/Aug’25 Brent futures spreads stand at $0.27/bbl and $1.13/bbl, respectively.

The Feb’25 Brent futures contract saw strength this morning, increasing from $71.50/bbl at 07:00 GMT to around $72.10/bbl at 08:25 GMT, before tapering off to $71.80/bbl at 10:40 GMT (time of writing). In the news today, Israel has struck chemical weapons sites in Syria in reaction to the toppling of Bashar al-Assad’s regime, with Israel’s Defence Minister Israel Katz stating the country’s military was continuing to seize “high ground” inside Syria, according to Financial Times. A wide area of the Israel-Syria border was governed by a 1974 armistice agreement, with Israeli Prime Minister Netanyahu claiming this agreement has now “collapsed”. Meanwhile, US President-elect Trump called for an immediate ceasefire between Ukraine and Russia on 8 Dec, with Kremlin spokesman Dmitry Peskov saying Russia was open to talks. For a peace deal to go ahead, Russian President Putin has stated Ukraine must not join NATO and Russia should be given full control of four Ukrainian regions his troops partially occupy, as per Reuters. In other news, Saudi Arabia has lowered its Arab Light OSP for Asian customers from $1.70/bbl in December to $0.90/bbl for January-loading cargoes. According to Reuters, this is the lowest premium for Arab Light since January 2021. Finally, China’s Politburo led by President Xi Jinping announced it will embrace a “moderately loose” strategy for monetary policy in 2025, as per Bloomberg. Top officials made pledges to “stabilise property and stock markets” and emphasised the importance of boosting consumption, as Beijing prepares for the potential impact of US President-elect Trump’s vow to impose a 60% tariff on Chinese exports. At the time of writing, the Feb/Mar’25 and Feb/Aug’25 Brent futures spreads stand at $0.31/bbl and $1.10/bbl, respectively.