Reports

The Jan’25 Brent futures contract continued to weaken this afternoon from $72.85/bbl at 12:00 GMT down to $71.80/bbl at 17:55 GMT (time of writing). This afternoon, Israeli Foreign Minister Gideon Saar in Jerusalem has stated there was a “certain progress” in ceasefire talks with Hezbollah. In the news today, Saudi Arabia is projected to deliver 36.5mb of crude to China in December, reduced from an expected 37.5mb for November amid weak Chinese oil demand, according to trade data compiled by Reuters. December would mark the second consecutive month of lower Saudi deliveries to China. In other news, India has become the EU’s largest fuel exporter this year by taking advantage of a refining loophole, as reported by Finland’s Centre for Research on Energy and Clean Air (CREA). This loophole allows non-Russian countries to process crude oil without restrictions on its origin, despite Western sanctions. Between Q1 and Q3’24, this allowed the Jamnagar, Vadinar, and new Mangalore refinery to export 58% more oil products to the EU y/y, while India was the second-largest buyer of Russian fossil fuels following China in October. Finally, US national gasoline prices have fallen to a 3-year low today at $3.03/gal, the lowest since May 2021. At the time of writing, the Jan/Feb’25 and Jan/Jul’25 Brent futures spreads stand at $0.20/bbl and $0.77/bbl, respectively.

The Jan’25 Brent futures contract weakened further this afternoon, trading at around $74.90/bbl at 12:00 GMT and selling-off from $74.85/bbl at 14:10 GMT down to $73.95/bbl at 17:45 GMT (time of writing). Crude oil prices fell as Hurricane Rafael is forecast to weaken and move away from the US Gulf Coast oilfields in coming days, the US National Hurricane Center said. In the news today, Iran’s oil loadings fell from nearly 1.83mb/d in September to 1.48mb/d last month, marking a daily decline of 350kb/d, according to Kpler Senior Analyst Homayoun Falakshahi. The Wall Street Journal reported that US President Trump plans to renew his ‘maximum pressure’ campaign against Iran, drastically increasing sanctions in order to hamper Tehran’s ability to support its proxies in the Middle East. In other news, Iraq’s parliament is due to discuss a new bill on oil exports, a Kurdish MP Sabah Subhi told Kurdistan24. Subhi was optimistic an agreement between Iraq and Kurdistan could be reached, however, highlighted growing security concerns surrounding potential supply disruption in Iraq, claiming any instability would be “catastrophic”. Finally, the Israeli military it is planning to reopen the Kissufim crossing into central Gaza to increase flow of aid into the strip, amid growing pressure from aid agencies. At the time of writing, the Jan/Feb’25 and Jan/Jul’25 Brent futures spreads stand at $0.30/bbl and $1.12/bbl, respectively.

The Jan’25 Brent futures contract rallied from $74.25/bbl at 12:00 GMT today up to $75.70/bbl just after 17:30 GMT (time of writing). Crude oil prices rose amid expectations of a 25 basis point Fed rate cut to be announced at 19:00 GMT tonight. Earlier today, the Bank of England cut interest rates by 25 bps from 5% to 4.75%. In the news today, Hezbollah lawmaker Ibrahim al-Moussawi said that the Lebanese group welcomes any effort to stop the conflict but does not pin hopes for a ceasefire on any particular US administration, as stated in a Reuters report. In other news, China’s crude oil imports remain low in October at 10.53mb/d (-9% y/y), marking the sixth straight month where oil imports have fallen compared to the same months in 2023, according to data from the General Administration of Customs. This follows reduced capacity at PetroChina’s largest refinery in Dalian and weak demand from independent Chinese refiners. Finally, Ghana’s crude oil output has increased by 10.7% y/y in the first six months of 2024, at 24.9mb for June 2024, the country’s Public Interest and Accountability Committee (PIAC) reported. The increase was primarily driven by Tullow Oil’s Jubilee South East (JSE) project, which commenced production in late 2023, 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 $1.44/bbl, respectively.

The Jan’25 Brent futures contract saw consistent strength this afternoon, ultimately increasing from $74.60/bbl at 12:00 GMT to $75.30/bbl at 17:40 GMT. Crude oil prices rallied from around $73.40/bbl at 13:50 GMT up to $75.92/bbl just after 16:00 GMT as the market reacted to increasing threats to US Gulf Coast oil production from Hurricane Rafael and US President Trump’s election victory. A build of nearly 2.15mb compared to an expected 1.8mb in US crude oil inventories for the week to 01 Nov, announced in EIA data released at 15:30 GMT, led to a 40c drop to $74.95/bbl but otherwise had little effect as Brent continued to strengthen. In the news today, Russian Energy Ministry data showed the nation’s crude oil production in October was at 8.97mb, up 3kb/d from September and just 5kb/d above the OPEC+ quota for the month. In other news, Iraq’s oil exports were recorded at 3.3mb/d in October, according to Oil Ministry figures, with the government continuing to restrain output in response to pressure from OPEC+. Finally, India’s oil demand rose by 2.9% y/y in October to nearly 20.04 million metric tons, with gasoline, LPG, and aviation turbine fuel accounting for the largest increases in demand, according to PPAC reposted in a note by Giovanni Staunovo. At the time of writing, the Jan/Feb’25 and Jan/Jul’25 Brent futures spreads stand at $0.39/bbl and $1.52/bbl, respectively.